
aass Hl5 5- ^^ 

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DEFENCE OF USURY; 

SHEWING THE IMPOLICY OF THE 

PRESENT LEGAL RESTRAINTS /^f^T 

ON THE TERMS OF 

PECUNIARY BARGAINS; 

IN 

Letters; to a JTrieriHi* 

TO WHICH IS ADDED, 

A LETTER 

TO 

ADAM SMITH, Esq. LL.D. 

ON THE DISCOURAGEMENTS OPPOSED BY THE ABOVE 
RESTRAINTS TO THE PROGRESS OF 

INVENTIVE INDUSTRY. 



THE FOURTH EDITION. 

AND TO WHICH IS ALSO ADDED, 

THIRD EDITION, 

A PROTEST AGAINST LAW-TAXES. 



By JEREMY BENTHAM, 




LONDON: 
PRINTED FOR PAYNE AND FOSS, PALL-MALL. 

ISIS. 



v\- 



J. M^Cieery, Printei ,. 
Blaskiioree-CcvH t, Loudoa* 



CONTENTS 



LETTER I. 

Introduction . . . Page i 

LETTER IL 

Reasons for Restraint. — Prevention of 
Usury ......... 6 

LETTER III. 

Reasojis for Restraint. — Prevention of 
Prodigality 16 



CONTENTS. 



LETTER IV. 

Reasons for Restraint. — Protection of 
Indigence Page 32 



LETTER V. 

Reasons for Restraint. — Protection of 
Simplicity . . . ... . 39 



LETTER VI. 

Mischiefs of the anti-usurious Laws, 45 

LETTER VII. 

Efficacy of anti-usurious Laws . . 62 



CONTENTS. 

LETTER VIII. 

Virtual Usury allowed . . Page 75 

LETTER IX. 

Blacks tone considered . . . . 84 

LETTER X. 

Grounds of the Prejudices against 
Usury 94 

LETTER XI. 

Compound Interest 1 10 

LETTER XII. 

Maintenance and Champerty , . 117 



CONTENTS. 



LETTER XIII. 



To Dj\ Smith, on Projects in Arts, 
SCc Page 129 



DEFENCE OF USURY. 

LETTER I. 

Introduction, 

trichofy in While Russia^ January ^ 1787. 

Among the various species or 
modifications of liberty, of which 
on different occasions we have heard 
so much in England, I do not re- 
collect ever seeing any thing yet of- 
fered in behalf of the liberty of mak- 
ing one*s own terms in money-bargains. 
From so general and universal a ne- 
glect, it is an old notion of mine, 
as you well knov/, that this meek and 
unassuming species of liberty has been 
suffering much injustice. 

B A fancy 



^ Lett. I. Introduction. 

A fancy has taken me, just now, to 
trouble you with my reasons ; which, 
if you think them capable of answer- 
ing any good purpose, you may for- 
ward to the press : or in the other 
case, what will give you less trouble, 
to the fire. 

In a word, the proposition I have 
been accustomed to lay down to my- 
self on this subject is the following 
one, viz. that no man of ripe years and 
of sound mind, acting freely, and with 
his eyes open, ought to be hindered, with 
a view to his advatitage, from making 
such bargain, in the way of obtaining 
money, as he thinks fit : nor, (what is a 
necessary consequence) any body hin- 
dered from supplying him, upon any 
terms he thinks proper to accede to. 

This proposition, were it to be re- 

^ fceived, would level, you see, at one 

istroke, all the barriers which law, 

either 



Lett. I. Introduction, 8 

either statute or common, have in 
their united wisdom set up, either 
against the crying sin of Usury, or 
against the hard- named and little- 
heard-of practice of Champerty; to 
which we must also add a portion of 
the multifarious, and as little-heard- 
of offence, of Maintenance. 

On this occasion, were it any indi- 
vidual antagonist I had to deal with, 
my part would be a smooth and easy 
one. *^ You, who fetter contracts ; 
" you, who lay restraints on the liber- 
" ty of man, it is for you'* (I should 
say) " to assign a reason for your do- 
" ing so." That contracts in general 
ought to be observed, is a rule, the 
propriety of which, no man was ever 
yet found wrong-headed enough to 
deny : if this case is one of the excep- 
tions (for some doubtless there are) 
which the safety and welfare of every 
B 2! society 



4 Lett. I. Introduction. 

society require should be taken out 
of that general rule, in this case, as in 
all those others, it lies upon him, who 
alledges the necessity of the excep- 
tion, to produce a reason for it. 

This, I say, would be a short and 
very easy method with an individual : 
but, as the world has no mouth of its 
own to plead by, no certain attorney 
by which it can '^ come and defend 
*' this force and injury,'* I must even 
find arguments for it at a venture, and 
ransack my own imagination for such 
phantoms as I can find to fight with. 

In favour of the restraints opposed 
to the species of liberty I contend forj, 
I can imagine but five arguments. 

1. Prevention of usury. 

2. Prevention of prodigality. 

3. Protection of indigence against 
extortion. 

4. Re- 



Lett. I. Introduction. 5 

4. Repression of the temerity of 
projectors. 

5. Protection of simplicity against 
imposition. 

Of all these in their order. 



6 Lett. II. Reasons for Restraint, 



LETTER XL 

Reasons for Restraint. — Prevention of 
Usury, 

I Will begin with the prevention of 
usury: because in the sound of the 
word usury lies, I take it, the main 
strength of the argument : or, to speak 
strictly, of what is of more import- 
ance than all argument, of the hold 
which the opinion I am combating 
has obtained on the imaginations and 
passions of mankind. 

Usury is a bad thing, and as such 
ought to be prevented : usurers are a 
bad sort of men, a very bad sort of 
men, and as such ought to be punished 
and suppressed. These are among 

the 



Prevention of Usury. 7 

the string of propositions which every 
man finds handed down to him from 
his progenitors : which most men are 
disposed to accede to without exami- 
nation, and indeed not unnaturally 
nor even unreasonably disposed, for 
it is impossible the bulk of mankind 
should find leisure, had they the abi- 
lity, to examine into the grounds of 
an hundredth part of the rules and 
maxims, which they find themselves 
obliged to act upon. Very good apo- 
logy this for John Trot : but a little 
more inquisitiveness may be required 
of legislators. 

You, my friend, by whom the true 
force of words is so well understood, 
have, I am sure, gone before me in 
perceiving, that to say usury is a 
thing to be prevented, is neither 
more nor less than begging the mat- 
ter in question, I know of but two 

definitions 



8 Lett. II. Reasons for Restraint. 

definitions that can possibly be given 
of usury : one is, the taking of a 
greater interest than the law allows 
of: this may be styled the political 
or legal definition. The other is the 
taking of a greater interest than it is 
usual for men to give and take : this 
may be styled the moral one: and 
this, where the law has not interfered, 
is plainly enough the only one. It is 
plain, that in order for usury to be 
prohibited by law, a positive descrip- 
tion must have been found for it by 
law, fixing, or rather superseding, 
the moral one. To say then that 
usury is a thing that ought to be 
prevented, is saying neither more nor 
less, than that the utmost rate of in- 
terest which shall be taken ought to 
be fixed; and that fixation enforced 
by penalties or such other means, 
if any, as may answer the purpose of 

preventing 



Prevention of Usury. 9 

preventing the breach of it. A law 
punishing usury supposes, therefore, 
a law fixing the allowed legal rate of 
interest : and the propriety of the pe- 
nal law must depend upon the pro- 
priety of the simply-prohibitive, or, 
if you please, declaratory one. 

One thing then is plain ; that, an- 
tecedently to custom growing from 
convention, there can be no such 
thing as usury ; for what rate of in- 
terest is there that can naturally be 
more proper than another? what na- 
tural fixed price can there be for the 
use of money more than for the use of 
any other thing ? Were it not then 
for custom, usury, considered in a 
moral view, would not then so much 
as admit of a definition : so far from 
having existence, it would not so 
much as be conceivable : nor there- 
fore could the law, in the definition 
b3 it 



10 Lett. II. Reasons for Restraint, 

it took upon itself to give of such 
offence, have so much as a guide to 
steer by. Custom therefore is the 
sole basis, vi^hieh, either the moralist 
in his rules and precepts, or the le- 
gislator in his injunctions, can have 
to build upon. But what basis can 
be more weak or unwarrantable, as a 
ground for coercive measures, than 
custom resulting from free choice ? 
My neighbours, being at liberty, have 
happened to concur among them- 
selves in dealing at a certain rate of 
interest. I, who have money to lend, 
and Titius, who wants to borrow it 
of me, would be glad, the one of us 
to accept, the other to give, an in- 
terest somewhat higher than theirs: 
why is the liberty they exercise to be 
made a pretence for depriving me and 
Titius of ours? 

Nor 



Prevention of Usury. 1 1 

Nor has blind custom, thus made 
the sole and arbitrary guide, any 
thing of steadiness or uniformity in 
its decisions : it has varied, from age 
to age, in the same country, it va- 
ries, from country to country, in the 
same age : and the legal rate has va- 
ried along with it ; and indeed, with 
regard to times past, it is from the 
legal rate, more readily than from 
any other source, that we collect the 
customary. ^-Among the Romans, till 
the time of Justinian, we find it as 
high as 12 per cent. ; in England, so 
late as the time of Henry VIII., we 
find it at 10 per cent. I succeeding 
statutes reduced it to 8, then to 6, 
and lastly to 5, where it stands at 
present. Even at present in Ireland 
it is at 6 per cent. ; and in the West- 
Indies at 8 per cent. ; and in Hin- 
dostan, where there is no rate limited 

by 



12 Lett. II. Reasons for Restraint. 

by law, the lowest customary rate is 
10 or IQ. At Constantinople, in cer- 
tain cases, as I have been well in- 
formed, thirty per cent, is a com- 
mon rate. Now, of all these widely 
different rates, what one is there that 
is intrinsically more proper than ano- 
ther ? What is it that evidences this 
propriety in each instance ? what but 
the mutual convenience of the par- 
ties, as manifested by their consent? 
It is convenience then that has pro- 
duced whatever there has been of cus- 
tom in the matter : What can there 
then be in custom, to make it a bet- 
ter guide than the convenience which 
gave it birth ? and what is there in 
convenience, that should make it a 
worse guide in one case than in ano- 
ther ? It would be convenient to me 
to give 6 per cent, for money : I 
wish to do so, " No," (says the law) 

" you 



Prevention of Usury, 13 

*' you shan't." — Why so r " Because 
*^ it is not convenient to your neigh- 
" hour to give above 5 for it." Can 
any thing be more absurd than such a 
reason r 

^^ Much has not been done, I think, 
by legislators as yet in the way of fix- 
ing the price of other commodities : 
and, in what little has been done, 
the probity of the intention has, I 
believe, in general, been rather more 
unquestionable than the rectitude of 
the principle, or the felicity of the 
result.'/ Putting money out at interest, 
is exchanging present money for fu- 
ture : but why a policy, which, as 
applied to exchanges in general, 
would be generally deemed absurd 
and mischievous, should be deemed 
necessary in the instance of this par- 
ticular kind of exchange, mankind 
are as yet to learn. For him who 

takes 



14 Lett. II. Reasons for Restraint, 

takes as much as he can get for the 
use of any other sort of thing, an 
house for instance, there is no parti- 
cular appellation, nor any mark of 
disrepute: nobody is ashamed of do- 
ing so, nor is it usual so much as to 
profess to do otherwise. Why a man 
who takes as much as he can get, be 
it six, or seven, or eight, or ten per 
cent, for the use of a sum of money, 
should be called usurer, should be 
loaded with an opprobrious name, any 
more than if he had bought an house 
with it, and made a proportionable 
profit by the house, is more than I can 
see. 

Another thing I would also wish 
to learn, is, why the legislator should 
be more anxious to limit the rate of 
interest one way, than the other ? 
why he should set his face against the 
owners of that species of property 

more 



Prevention of Usury, 15 

more than of any other? why he 
should make it his business to prevent 
their getting more than a certain price 
for the use of it, rather than to prevent 
their getting lessf why, in short, he 
should not take means for making it 
penal to offer less, for example, than 
5 per cent, as well as to accept more ? 
Let any one that can, find an answer 
to these questions ; it is more than I 
can do : I except always the distant 
and imperceptible advantage, of sink- 
ing the price of goods of all kinds ; 
and, in that remote way, multiplying 
the future enjoyments of individuals. 
But this was a consideration by far too 
distant and refined, to have been the 
original ground for confining the limi- 
tation to this side. 



16 Lett. III. Reasons for Restraint. 



LETTER III. 

Reasons for Restraint, — Prevention of 
Prodigality, 

Having done with sounds, I conae 
gladly to propositions ; which, as far 
as they are true in point of fact, may 
deserve the name of reasons. And 
first, as to the efficacy of such restric- 
tive laws with regard to the Prevention 
of Prodigality. 

That prodigality is a bad thing, 
and that the prevention of it is a pro- 
per object for the legislator to propose 
to himself, so long as he confines him- 
self to, what I look upon as, proper 
measures, I have no objection to allow, 
at least for the purpose of the argu- 
ment 5 



Prevention of Prodigality, 17 

ment ^ though were this the principal 
question, I should look upon it as in- 
cumbent on me to place in a fair light 
the reasons there may be for doubting, 
how far, with regard to a person arriv- 
ed at the age of discretion, third per- 
sons may be competent judges; which 
of two pains may be of greater force 
and value to him, the present pain of 
restraining his present desires, or the 
future contingent pain he may be ex- 
posed to suffer from the want to which 
the expense of gratifying these desires 
may hereafter have reduced him. To 
prevent our doing mischief to one 
another, it is but too necessary to put 
bridles into all our mouths : it is ne- 
cessary to the tranquillity and very be- 
ing of society : but that the tacking 
of leading-strings upon the backs of 
grown persons, in order to prevent 
their doing thenniselves a mischief, is 



18 Lett. III. Reasons for Restraint. 

not necessary either to the being or 
tranquillity of society, however con- 
ducive to its well-being, I think can- 
not be disputed. Such paternal, or, if 
you please, maternal care, may be a 
good work, but it certainly is but a 
work of supererogation. 

For my own part, I must confess, 
that so long as such methods only are 
employed, as to me appear proper ones, 
and such there are, I should not feel 
myself disinclined to see some measures 
taken for the restraining of prodigality : 
but this I cannot look upon as being 
of the number. My reasons I will 
now endeavour to lay before you. 

In the first place, I take it, that it 
is neither natural nor usual for prodi- 
gals, as such, to betake themselves to 
this method, I mean, that of giving 
a rate of interest above the ordinary 
one, to supply their wants. 

In 



Pretention of Prodigality, 19 

In the first place, no man, 1 ho^ie 
you will allow, prodigal or not prodi- 
gal, ever thinks of borrowing money 
to spend, so long as he has ready moraeij 
of his own, or effects which he can 
turn into ready money without loss. 
And this deduction strikes off what, 
I suppose, you will look upon as the 
greatest proportion of the persons 
subject, at any given time, to the im- 
putation of prodigality. 

In the next place, no man, in such 
a country as Great Britain at least, 
has occasion, nor is at all likely, to 
take up money at an extraordinary 
rate of interest, who has security to 
give, equal to that upon which money 
is commonly to be had at the highest 
ordinary rate. While so many ad- 
vertise, as are to be seen every day 
advertising, money to be lent at five 
per cent, what should possess a man, 

who 



20 Lett. III. Reasons for Restraint, 

who has any thing to offer that can 
be called a security, to give, for ex* 
ample, six per cent., is more than I 
can conceive. 

You may say, perhaps, that a man 
who wishes to lend his money out up- 
on security, wishes to have his inter- 
est punctually, and that without the 
expense, and hazard, and trouble, 
and odium of going to law; and 
that, on this account, it is better to 
have a sober man to deal with than a 
prodigal. So far I allow you ; but 
were you to add, that on this ac- 
count it would be necessary for a pro- 
digal to offer more than another man, 
there I should disagree with you. In 
the first place it is not so easy a thing, 
nor, I take it, a common thing, for 
the lender upon security to be able to 
judge, or even to form any attempt 
to judore, whether the conduct of 

one 



Prevention of Prodigality. 211 

one who offers to borrow his money 
is or is not of such a cast, as to bring 
him under this description. The 
question, prodigal or not prodigal, 
depends upon two pieces of informa- 
tion ; neither of which, in general, 
is very easy to come at : on the one 
hand, the amount of his means and 
reasonable expectations; on the other 
hand, the amount of his expenditure. 
The goodness or badness of the se- 
curity is a question of a very differ- 
ent nature : upon this head, every 
man has a known and ready means of 
obtaining that sort of information, 
which is the most satisfactory the na- 
ture of things affords, by going to 
his lawyer. It is accordingly, I take 
it, on their lawyer's opinion, that 
lenders in general found their deter- 
mination in these cases, and not upon 
any calculations they may have formed, 

con- 



22 Lett. III. Reasons for Restraint 

concerning the receipt and expen- 
diture of the borrower. But even 
supposing a man's disposition to pro- 
digality to be ever so well known, 
there are always enough to be found, 
to whom such a disposition would be 
rather an inducement than an objec- 
tion, so long as they were satisfied 
with the security. Every body knows 
the advantage to be m3;de in case of 
mortgage, by foreclosing or forcing a 
sale : and that this advantage is not 
uncommonly looked out for, will, I 
believe, hardly be doubted by any 
one, who has had any occasion to ob- 
serve the course of business in the 
court of Chancery. 

In short so long as a prodigal has 
any thing to pledge, or to dispose of, 
whether in possession, or even in re- 
version, whether of a certain or even 
of a contingent nature, I see not, 

how 



Prevention of Prodigality, 23 

how he can receive the smallest bene- 
fit, from any laws that are, or can be 
made to fix the rate of interest. For, 
suppose the law to be efficacious as 
far as it goes, and that the prodigal 
can find none of those monsters called 
usurers to deal with him, does he lie 
quiet? no such thing: he goes on, 
and gets the monfy he wants, by sel- 
ling his interest instead of borrow- 
ing. He goes on, I say : for if he has 
prudence enough to stop him any 
where, he is not that sort of man, 
whom it can be worth while for the law 
to attempt stopping by such means. 
It is plain enough then, that to a 
prodigal thus circumstanced, the law 
cannot be of any service -, on the con- 
trary, it may, and in many cases must, 
be of disservice to him, by denying 
him the option of a resource, which, 
how disadvantageous soever, could 

not 



24 Lett* III. Reasons for Restraint. 

not well have proved more so, but 
would naturally have proved less so, 
than those which it leaves still open 
to him. But of this hereafter. 

I now come to the only remaining 
class of prodigals, viz. those who have 
nothing that can be called a security to 
offer. These, I should think, are not 
more likely to get money upon an ex- 
traordinary rate of interest, than an or- 
dinary one. Persons who either feel, 
or find reasons for pretending to feel, 
a friendship for the borrower, can not 
take of him more than the ordinary 
rate of interest : persons who have no 
such motive for lending him, will not 
lend him at all. If they know him 
for what he is, that will prevent them 
of course : and even though they 
should know nothing of him by any 
other circumstance, the very circum- 
stance of his not being able to find a 

friend 



Prevention of Prodigality. 2.5 

friend to trust him at the highest or- 
dinary rate, will be sufficient reason to 
a stranger for looking upon him as a 
man, who, in the judgment of his 
friends, is not likely to pay. 

The way that prodigals run into 
debt, after they have spent their sub- 
stance, is, 1 take it, by borrowing of 
their friends and acquaintance, at or- 
dinary interest, or more commonly at 
no interest, small sums, such as each 
man may be content to lose, or be 
ashamed to ask real security for 5 and 
as prodigals have generally an exten- 
sive acquaintance (extensive acquaint- 
ance being at once the cause and effect 
of prodigality), the sum total of the 
money a man may thus find means to 
squander, may be considerable, tho* 
each sum borrowed may, relatively to 
the circumstances of the lender, have 
been inconsiderable. This I take to 
C be 



26 Lett. III. Reasons for Restraint. 

be the race which prodigals, who have 
spent their all, run at present, under 
the present system of restraining laws: 
and this, and no other, I take it, would 
be the race they would run, were those 
laws out of the way. 

Another consideration there is, I 
think, which will compleat your con- 
viction, if it was not compleat be- 
fore, of the inefRcacy of these laws, 
as to the putting any sort of restraint 
upon prodigality. This is, that there 
is another set of people from whom 
prodigals get what they w^ant, and al- 
ways will get it, so long as credit lasts, 
in spite of all laws against high in- 
terest; and, should they find it neces- 
sary, at an expense more than equal 
to an excess of interest they might 
otherwise have to give. I mean the 
tradesmen who deal in the goods they 
want. Every body knows it is much 

easier 



Pretention of Prodigality, 27 

easier to get goods than money. Peo- 
ple trust goods upon much slenderer 
security than they do money : it is very 
natural they should do so : ordinary 
profit of trade upon the whole capi- 
tal employed in a man*s trade, even 
after the expense of warehouse-rent, 
journeymen's wages, and other such 
general charges, are taken into the 
account, and set against it, is at least 
equal to double interest; say 10 per 
cent. Ordinary profit upon any par- 
ticular parcel of goods must there- 
fore be a great deal more, say at least 
triple interest, 15 per cent. : in the 
way of trading, then, a man can af- 
ford to be at least three times as ad- 
venturous, as he can in the way of 
lending, and with equal prudence. 
So long, then, as a man is looked 
upon as one who will pay, he can 
much easier get the goods he wants, 
C 2 than 



28 Lett. III. Reasons for Restraint, 

than he could the money to buy them 
with, though he were content to give 
for it twice, or even thrice the ordinary 
rate of interest. 

Supposing any body, for the sake 
of extraordinary gain, to be willing 
to run the risk of supplying him, al- 
though they did not look upon his 
personal security to be equal to that 
of another man, and for the sake of 
the extraordinary profit to run the ex- 
traordinary risk ; in the trader, in 
short in every sort of trader whom he 
was accustomed to deal with in his 
solvent days, he sees a person who 
may accept of any rate of profit, 
without the smallest danger from any 
laws that are, or can be made against 
usury. How idle, then, to think of 
stopping a man from making six, or 
seven, or eight per cent, interest, 
when, if he chuses to run a risk pro- 
portionable. 



Prevention of Prodigality. ^9 

portionable, he may in this way make 
thirty or forty per cent, or any rate 
you please. And as to the prodigal, 
if he cannot get what he wants upon 
these terms, what chance is there of 
his getting it upon any terms, sup- 
posing the laws against usury, to be 
away ! This then is another way, in 
which, instead of serving, it injures 
him, by narrowing his option, and 
driving him from a market which 
might have proved less disadvantage- 
ous, to a more disadvantageous one. 

As far as prodigality, then, is con- 
cerned, I must confess, I cannot see 
the use of stopping the current of ex- 
penditure in this way at the fosset, 
when there are so many unprevent- 
able ways of letting it run out at the 
bung-hole. 

Whether any harm is done to so- 
ciety, upon the whole, by letting so 

much 



so Lett. III. Reasons for Restraint* 

much money drop at once, out of the 
pockets of tlie prodigal, who would 
have gone on wasting it, into the till 
of the frugal tradesman, who will lay 
it up, is not worth the inquiry for 
the present purpose : what is plain is, 
that, so far as the saving the pro- 
digal from paying at an extraordinary 
rate for what he gets to spend, is the 
object of the law, that object is not 
at all promoted, by fixing the rate of 
interest upon money borrowed. On 
the contrary, if the law has any ef- 
fect, it runs counter to that object : 
since, were he to borrow, it would 
only be, in as far as he could borrow 
at a rate inferior to that at which 
otherwise he would be obliged to buy, 
I • Preventing his borrowing at an extra- 
^^ rate, may have the effect of increasing 
his distress, but cannot have the effect 
of lessening it: allowing his borrowing 

at 



Prevention of Prodigality. 31 

at such a rate, might have the effect 
of lessening his distress, but could not 
have the effect of increasing it. 

To put a stop to prodigality, if in- 
deed it be worth while, I know but 
of one effectual course that can be 
taken, in addition to the incompleat 
and insufficient courses at present 
practicable, and that is to put the 
convicted prodigal under an interdict^ 
as was practised fornaerly among the 
Romans, and is still practised among 
the French, and other nations who 
have taken the Roman law for the 
ground- work of their own. But to 
discuss the expediency, or sketch out 
the details of such an institution, be- 
longs not to the present purpose. 



32 Lett. IV. Reasons for Restraint. 



LETTER IV. 

Reasons for Restraint, — Protection of 
Indigence. 

Besides prodigals, there are 
three other classes of persons, and 
but three, for whose security I can 
conceive these restrictive laws to have 
been designed. I mean the indigent, 
the rashly enterprizing, and the sim- 
ple : those whose pecuniary necessities 
may dispose them to give an interest 
above the ordinary rate, rather than 
not have it, and those who, from rash- 
ness, may be disposed to venture upon 
giving such a rate, or from careless- 
ness combined with ignorance, may be 
disposed to acquiesce in it. 

In 



Protection of Indigence^ S3 

In speaking of these three different 
classes of persons^ I must beg leave to 
consider one of them at a time: and 
accordingly, in speaking of the indi- 
gent, I must consider indigence in the 
first place as untinctured with simpli- 
city. On this occasion, I may sup- 
pose, and ought to suppose, no parti- 
cular defect in a man's judgment, or 
his temper, that should mislead him, 
more than the ordinary run of men. 
He knows what is his interest as well 
as they do, and is as well disposed and 
able to pursue it as they are. 

I have already intimated, what 1 
think is undeniable, that there are 
no one or two or other limited num- 
ber of rates of interest, that can be 
equally suited to the unlimited num- 
ber of situations, in respect of the de- 
gree o^ exigency i in which a man is li- 
able to find himself: insomuch that 
C3 to 



34 Let r. IV. Reasons for Bcstraint. 

to the situation of a man, who hy the 
use of money can make, lor example, 
11 per cent., six per cent, is as well 
adapted, as 5 per cent, is to the situ- 
ation of him who can make but 10; 
to tliat of iiim who can make 12 per 
cent, seven, and so on. So, in the case 
of his wanting it to save himself from 
a loss, (which is that wliich is most 
likely to be in view under the name 
of exigency) if that loss would amount 
to 11 percent. 6 percent, is as well 
adapted to his situation, as 5 per 
cent, would be to the situation of 
him, who had but a loss amounting 
to ten per cent, to save himself from 
by the like means. And in any case, 
though, in proportion to the amount 
of the loss, the rate of interest were 
even so great, as that the clear saving 
Bhould not amount to more than one 
per cent, or any fraction per cent, yet 

so 



Protection of Indigence, 35 

so Jong as it amounted to any thing, 
he would be just so much the better 
for borrowing even on such compa- 
ratively disadvantageous terms. If, 
instead of gain, we put any other 
kind of benefit or advantage — if, in- 
stead of loss, we put any other kind 
of mischief or inconvenience, of equal 
value, the result will be the same. 

A man is in one of these situations, 
suppose, in which it would be for his 
advantage to borrow. But his cir- 
cumstances are such, that it would 
not be worth any body's while to lend 
him, at the highest rate which it is 
proposed the law should allow; in 
short, he cannot get it at that rate. If 
he thought he could get it at that rate, 
most surely he would not give a 
higher ; he may be trusted for that : 
for by the supposition he has nothing 
defective in his understanding. But 

the 



36 Lett. IV. Reasons for Restraint, 

the fact is, he cannot get it at that 
lower rate. At a higher rate, how- 
ever, he could get it : and at that 
rate, though higher, it would be 
worth his while to get it: so he 
judges, who has nothing to hinder 
him from judging right ; who has 
every motive and every means for 
forming a right judgment ; who has 
every motive and every means for 
informing himself of the circum- 
stances, upon which rectitude of judg- 
ment, in the case in question, de- 
pends. The legislator, who knows 
nothing, nor can know any thing, of 
any one of all these circumstances, 
who knows nothing at all about the 
matter, comes and says to him — *^ It 
^^ signifies nothing ; you shall not 
" have the money : for it would be 
'^ doing you a mischief to let you 
^'borrow it upon such terms." — 

And 



Protection of Indigence, 37 

And this out of prudence and lov- 
ing-kindness 1 — There may be worse 
cruelty : but can there be greater 
folly ? 

The folly of those who persist, as 
is supposed, without reason, in not 
taking advice, has been much expa- 
tiated upon. Bat the folly of those 
who persist, without reason, in forcing 
their advice upon others, has been 
but little dwelt upon, though it is, 
perhaps, the more frequent, and the 
more flagrant of the two. It is not 
often that one man is a better judge 
for another, than that other is for 
himself, even in cases where the ad- 
viser will take the trouble to make 
himself master of as many of the ma- 
terials for judging, as are within the 
reach of the person to be advised. 
But the legislator is not, cannot be, 
in the possession of any one of these 

materials 



3S Lett. IV. Reasons for Restraint. 

materials. — What private, can be 
equal to such public folly ? 

I should now speak of the enter^ 
prizing class of borrowers : thoge, 
who, when characterized by a single 
term, are distinguished by the unfa- 
vourable appellation of projectors: 
but in what I shall have to say of 
them. Dr. Smith, I begin to foresee, 
will bear so material a part, that 
when I come to enter upon that sub- 
ject, I think to take my leave of you, 
and address myself to him. 



Protection of Simplicity, 59 



LETTER V. 

Reasons for Restraint. — Protection of 
Simplicity. 

I Come, lastly, to the case of the 
simple. Here, ia the first place, I 
think I am by this time entitled to 
observe, that no simplicity, short of 
absolute idiotism, can cause the in- 
dividual to make a more groundless 
judgment than the legislator, who 
in the circumstances above stated, 
should pretend to confine him to any 
given rate of interest, would have 
made for him. 

Another consideration, equally con- 
clusive, is, that were the legislator's 
judgment ever so much superior to 
the individual's how weak soever 

that 



40 Lett. V. Reasons for Restraint. 

that may be, the exertion of it on this 
occasion can never be any otherwise 
than useless, so long as there are so 
many similar occasions, as there ever 
must be, where the simplicity of the 
individual is equally likely to make 
him a sufferer, and on which the legis- 
lator cannot interpose with effect, nor 
has ever so much as thought of in- 
terposing. 

Buying goods with money, or upon 
credit, is the business of every day : 
borrowing money is the business, only, 
of some particular exigency, which, 
in comparison, can occur but seldom. 
Regulating the prices of goods in ge- 
neral would be an endless task, and no 
legislator has ever been weak enough 
to think of attempting it. And sup- 
posing he were to regulate the prices, 
what would that signify for the pro- 
tection of simplicity, unless he were 

to 



Protection of Simplicity, 4 1 

to regulate also the quantum of what 
each man shoiild buy ? Such quan- 
tum irs indeed regulated, or rather 
means are taken to prevent buying 
altogether, but in what cases? In 
those only where the weakness is ad- 
judged to have arrived at such a pitch, 
as to render a man utterly unqualified 
for the management of his affairs: in 
short, when it has arrived at the length 
of idiocy. 

But in what degree soever a man's 
weakness may expose him to imposi- 
tion, he stands much more exposed 
to it, in the way of buying goods, 
than in the way of borrowing money. 
To be informed, beforehand, of the 
ordinary prices of all the sorts of 
things, a man may have occasion to 
buy, may be a task of considerable 
variety and extent. To be informed 
of the ordinary rate of interest, is to 

be 



42 Lett. V. Reasons for Restraint, 

be informed of one single fact, too in- 
teresting not to have attracted atten- 
tion, and too simple to have escaped 
the memory. A few per cent, en- 
hancement upon the price of goods, 
is a matter that may easily enough 
pass unheeded j but a single per cent, 
beyond the ordinary interest of money, 
is a stride more conspicuous and start- 
ling, than many per cent, upon the 
price of any kind of goods. 

Even in regard to subjects, vehich, 
by their importance would, if any, 
justify a regulation of their price, such 
as for instance land, I question whether 
there ever was an instance where, with- 
out some such ground as, on the one 
side fraud, or suppression of facts ne- 
cessary to form a judgment of the 
value, or at least ignorance of such 
facts, on the other, a bargain was re- 
scinded, merely because a man had 

sold 



Protection of Simplicity. 43 

sold too cheap, or bought too dear. 
Were I to take a fancy to give a 
hundred years purchase instead of 
thirty, for a piece of land, rather than 
not have it, I don't think there is any 
court in England, or indeed any where 
else, that would interpose to hinder 
me, much less to punish the seller with 
the loss of three times the purchase 
money, as in the case of usury. Yet 
when I had got my piece of land, and 
paid my money, repentance, were the 
law ever so well disposed to assist me, 
might be unavailing : for the seller 
might have spent the money, or gone 
off with it. But, in the case of borrow- 
ing money, it is the borrower always, 
who, according to the indefinite, or 
short term for which money is lent, is 
on the safe side : any imprudence he 
may have committed with regard to 
the rate of interest, may be corrected 

at 



44 Lett.V. Reasons for Restraijii. 

at any time : if I find I have given too 
high an interest to one man, I have no 
more to do than to borrow of another 
at a lower rate, and pay off tlie first: 
if I cannot find any body to lend me 
at a lower, there cannot be a more 
certain proof that the first was not in 
reality too high. But of this hereafter. 



Misch iefs of and- usurious Laws . 45 



LETTER VI. 

Mischiefs of the anti-usurious Laws, 

In the preceding Letters, I have ex- 
amined all the naodes I can think of, 
in which the restraints, imposed by 
the laws against usury, can have been 
fancied to be of service. 

I hope it appears by this time, that 
there are no ways in which those laws 
can do any good. But there are se- 
veral, in which they can not but do 
mischief. 

The first I shall mention, is that of 
precluding so many people, altogether, 
from the getting the money they stand 
in need of, to answer their respective 
exigencies. Think what a distress it 

would 



46 Lett. VI. Mischiefs of the 

would profluce, were the liberty of bor- 
rowing denied to every body : denied to 
those who have such security to offer, 
as renders the rate of interest, they have 
to offer, a sufficient inducement, for a 
man who has money, to trust them 
with it. Just that same sort of dis- 
tress is produced, by denying that 
liberty to so many people, whose se- 
curity, though, if they were permitted 
to add something to that rate, it would 
be sufficient, is rendered insufficient 
by their being denied that liberty. 
Why the misfortune, of not being pos- 
sessed of that arbitrarily exacted de- 
gree of security, should be made a 
ground for subjecting a man to a 
hardship, which is not imposed on 
those who are free from tliat misfor- 
tune, is more tlian 1 can see. To dis- 
criminate the former class from the 
latter, 1 can see but this one circum- 
stance. 



anti-uiurwus Latrr, 47 

^aoce, v'%z. tiiat ibeir aec&^y i§ 
greater. This it is by the rerr sap* 
|K>fciii<>Q : for were it not, tliey could 
not be, what tln^ are tuyposed to be, 
willing to give mare to be rdieir^ 
from it. I& this point of vtefr tbeo^ 
the sole tendency of the ktw is, to 
heap disiresf upon distre». 

A seeofid mkschief U, that of reo* 
dering the tenos so mtich the wor^^e, 
to a ntiJtitiide of those, whose eireoflt- 
sTances exempt them fi-om betog pre- 
doded altogether fr<»D getting the 
money they have occasion lor« In 
tkkts csuse, the mischief, thoogh neees* 
saviiy less intea^Be than in the other. Is 
wukch mote pdpMe and coo^icwms. 
Those who caaoot borrow Miay get 
what thejr want, so kmg as they hare 
any thing to sdl. But while, oat of 
Umn^-kmAmtm, or wbatsoerer other 
motive^ the law pre^^ndes a man 60m 



48 Lett. VI. Mischief s of the 

borrowings upon terms which it deems 
tob disadvantageous, it does not pre- 
clude him from selling, upon any 
terms, howsoever disadvantageous. — 
Every body knows that forced sales 
are attended with a loss : and, to this 
loss, what would be deemed a most 
extravagant interest bears in general 
no proportion. When a man's move- 
ables are taken in execution, they 
are, I believe, pretty well sold, if, 
after all expenses paid, the produce 
amounts to two-thirds of what it 
would cost to replace them. In this 
way the providence and loving-kind- 
ness of the law costs him 33 per cent, 
and no more, supposing, what is sel- 
dom the case, that no more of the ef- 
fects are taken than what is barely 
necessary to make up the money due. 
If, in her negligence and weakness, 
she were to suffer him to offer 11 per 

cent. 



anti-usurious Laivs. 49 

cent, per annum for forbearance, it 
would be three years before he paid 
what he is charged with, in the first 
instance, by her wisdom. 

Such being the kindness done by 
the law to the owner of moveables, let 
us see how it fares with him who has 
an interest in immoveables. Before 
the late war, 30 years purchase for 
land might be reckoned, I think it is 
pretty well agreed, a medium price. 
During the distress produced by the 
war, lands, which it was necessary 
should be sold, were sold at 20, 18, 
nay, I believe, in some instances, 
even so low as 15 years purchase. If 
I do not misrecollect, I remember in- 
stances of lands put up to public auc- 
tion, for which nobody bid so high as 
fifteen. In many instances, villas, 
which had been bought before the 
war, or at the beginning of it, and, in 
D the 



50 Lett. VI. Mischief s of the 

the interval, had been improved rather 
than impaired, sold for less than half, 
or even the quarter, of what they had 
been bought for. I dare not here for 
my part pretend to be exact : but on 
this passage, were it worth their no- 
tice, Mr. Skinner, or Mr. Christie, 
could furnish very instructive notes. 
Twenty years purchase instead of 
thirty, I may be allowed to take, at 
least for illustration. An estate then 
of 1001. a year, clear of taxes, was 
devised to a man, charged, suppose, 
with 15001. with interest tiH the money 
should be paid. Five per cent, inte- 
rest, the utmost which could be ac- 
cepted from the owner, did not answer 
the incumbrancer's purpose : he chose 
to have the money. But 6 per cent, per- 
haps, would have answered his purpose, 
if not, most certainly it would have an- 
swered the purpose of somebody else : 

for 



anti-usurious Laws. 5\ 

for multitudes there all along were, 
whose purposes were answered by five 
per cent. The war lasted, I think, 
seven years : the depreciation of the 
value of land did not take place im- 
mediately : but as, on the other hand, 
neither did it immediately recover its 
former price upon the peace, if indeed 
it has even yet recovered it, we may 
put seven years for the time, during 
which it would be more advantageous 
to pay this extraordinary rate of in- 
terest than sell the land, and during 
which, accordingly, this extraordinary 
rate of interest would have had to run. 
One per cent, for seven years, is not 
quite of equal worth to seven per cent, 
the first year; say, however, that it is. 
The estate, which before the war was 
worth thirty years purchase, that is 
30001. and which the devisor had 
given to the devisee for that value, 
D 2 being 



52 Lett. VI. Mischief s of the 

being put up to sale, fetched but 20 
years purchase, 20001. At the end 
of that period it would have fetched 
its original value, 30001. Compare, 
then, the situation of the devisee at 
the 7 years end, under the law, with 
what it would have been, without the 
law. In the former case, the land sel- 
ling for 20 years purchase, i. e. 
20001. what he would have, after 
paying the 1,5001. is 5001. ; which, 
with the interest of that sum, at 5 
per cent, for seven years, viz. 1751. 
makes, at the end of that seven years, 
6751. In the other case, paying 6 
per cent, on the 1,5001. that is 901. 
a year, and receiving all that time the 
rent of the land, viz. 1001. he would 
have had at the seven years' end, the 
amount of the remaining ten pound 
during that period, that is 701. in ad- 
dition to his 10001. — 675. substracted 

from 



anti'usvrious Laws, 53 

from 1,0701. leaves .3951. This 3951. 
then, is what he loses out of 1,0701. 
almost 37 per cent, of his capital, by 
the loving-kindness of the lavr. Make 
the calculations, and yon will find, 
that, by preventing him from borrow- 
ing the money at 6 per cent, interest, 
it makes him nearly as much a sufferer 
as if he had borrowed it at ten. 

What I have said hitherto is con- 
fined to the case of those who have per- 
sent value to give, for the money they 
stand in need of. If they have no such 
value, then if they succeed in pur- 
chasing assistance upon any terms, it 
must be in breach of the law- their 
lenders exposing themselves to its ven- 
geance : for I speak not here of the ac- 
cidental case, of its being so constructed 
as to be liable to evasion. But, even 
in this case, the mischievous influence 
of the law still pursues them ; aggra- 
vating 



54 Lett. VI. Mischief s of the 

vating the very mischief it pretends 
to remedy. Though it be ineffica- 
cious in the way in which the legisla- 
tor wishes to see it efficacious, it is ef- 
ficacious in the way opposite to that in 
which he would wish to see it so. The 
effect of it is, to raise the rate of in- 
terest, higher than it would be other- 
wise, and that in two ways. In the 
first place, a man must, in common 
prudence, as Dr. Smith observes, 
make a point of being indemnified, not 
only for whatsoever extraordinary risk 
it is that he runs, independently of the 
law, but for the very risk occasioned 
by the law ; he must be insured, as it 
were, against the law. This cause 
would operate, were there even as many 
persons ready to lend upon the illegal 
rate, as upon the legal. But this is not 
the casp : a great number of persons 
are, of course, driven out of this com- 
petition. 



anti-usurious Laws, 65 

petition, by the danger of the busi- 
ness, and another great number, by 
the disrepute which, under cover of 
these prohibitory laws or otherwise, has 
fastened itself upon the name of usurer. 
So many persons, therefore, being 
driven out of the trade, it happens in 
this branch, as it must necessarily in 
every other, that those who remain 
have the less to wiih-hold them from 
advancing their terms; and without 
confederating (for it must be allowed 
that confederacy in such a case is 
plainly impossible) each one will find 
it easier to push his advantage up to 
any given degree of exorbitancy, than 
he would, if there were a greater num- 
ber of persons of the same stamp to 
resort to. 

As to the case where the law is so 
worded as to be liable to be evaded, 
in this case it is partly inefficacious 

and 



56 Lett. VI. Mischiefs of the 

and nugatory, and partly mischievous. 
It is nugatory as to all such, whose 
confidence of its being so is perfect : 
it is mischievous, as before, in regard 
to all such who fail of possessing that 
perfect confidence. If the borrower 
can find nobody at all who has confi- 
dence enough to take advantage of 
the flaw^, he stands precluded from all 
assistance, as before : and, though he 
should, yet the lender's terms must 
necessarily run the higher, in propor- 
tion to what his confidence wants of 
being perfect. It is not likely that it 
should be perfect : it is still less likely 
that he should acknowledge it so to 
be : it is not likely, at least as matters 
stand in England, that the worst-penned 
law made for this purpose should be 
altogether destitute of effect : and while 
it has any, that effect, we see, must be 
in one way or other mischievous. 

I have 



anti-usurious Laws, 57 

I have already hinted at the disre- 
pute, the ignominy, the reproach, 
which prejudice, the cause and the 
effect of these restrictive laws, has 
heaped upon that perfectly innocent 
and even meritorious class of men, 
who, not more for their own advan- 
tage than to the relief of the distresses 
of their neighbour, may have ven- 
tured to break through these restraints. 
It is certainly not a matter of indif- 
ference, that a class of persons, who, 
in every point of view in which their 
conduct can be placed, whether in re- 
lation to their own interest, or in re- 
lation to that of the persons whom 
they have to deal with, as well on the 
score of prudence, as on that of be- 
neficence, (and of what use is even 
benevolence, but in as far as it is 
productive of beneficence ?) deserve 
praise rather than censure, should be 
D 3 classed 



58 Lett. VI. Mischiefs of the 

classed with the abandoned and pro- 
fligate, and loaded with a degree of 
infamy, which is due to those only 
whose conduct is in its tendency the 
most opposite to their own. 

" This suffering," it may be said, 
" having already been taken account 
" of, is not to be brought to account a 
** second time : they are aware, as you 
^^ yourself observe, of this inconve- 
*^ nience, and have taken care to get 
^^ such amends for it, as they themselves 
** look upon as sufficient." True : but 
is it sure that the compensation, such 
as it is, will always, in the event, 
have proved a sufficient one? Is there 
no room here for miscalculation ? 
May there not be unexpected, un- 
looked-for incidents, sufficient to turn 
into bitterness the utmost sg.tisfaction 
which the difference of pecuniary 
emolument could afford? For who 

can 



anti-usurious Laws, ^ 59 

can see to the end of that inexhausti- 
ble train of consequences that are 
liable to ensue from the loss of repu- 
tation? Who can fathom the abyss 
of infamy? At any rate, this article 
of mischief, if not an addition in its 
quantity to the others above-noticed, 
is at least distinct from them in its 
nature, and as such ought not to be 
overlooked. 

Nor is the event of the execution 
of the law by any means an unex- 
ampled one : several such, at different 
times, have fallen within my notice. 
Then comes absolute perdition : loss 
of character, and forfeiture, not of 
three times the extra-interest, which 
formed the profit of the offence, but 
of three times the principal, which 

gave occasion to it *. 

The 

* See Introduction to the Principles of Morals 
and Legislation, 4to, 1789. Ch. 14. On the pro- 
portion between punishments and offences. 



60 Lett. VI. Mischief s of the 

The last article I have to mention 
in the account of mischief, is, the cor- 
ruptive influence, exercised by these 
laws, on the morals of the people; 
by the pains they take, and cannot 
but take, to give birth to treachery 
and ingratitude. To purchase a pos- 
sibility of being enforced, the law nei- 
ther has found, nor, what is very ma- 
terial, must it ever hope to find, in 
this case, any other expedient, than 
that of hiring a man to break his en- 
gagement, and to crush the hand that 
has been reached out to help him. In 
the case of informers in general, there 
has been no troth plighted, nor benefit 
received. In the case of real crimi- 
nals invited by rewards to inform 
against accomplices, it is by such 
breach of faith that society is held 
together, as in other cases by the 
observance of it. In the case of real 

crimes. 



anti-usurious Laws. 6l 

crimes, in proportion as their mis- 
chievousness is apparent, what cannot 
but be manifest even to the criminal, 
is, that it is by the adherence to his 
engagement that he would do an in- 
jury to society, and that by the breach 
of such engagement, instead of doing 
mischief he is doing good : in the 
case of usury this is what no man can 
know, and what one can scarcely think 
it possible for any man, who, in the 
character of the borrower, has been 
concerned in such a transaction, to 
imagine. He knew that, even in his 
own judgment, the engagement was 
a beneficial one to himself, or he 
would not have entered into it: and 
nobody else but the lender is affected 
by it. 



62 Lett. VII. Efficacy of 

LETTER VII. 

Efficacy of anti-usurious Laws. 

Before I quit altogether the con- 
sideration of the case in which a law, 
made for the purpose of limiting the 
rate of interest, may be inefficacious 
with regard to that end, I cannot for- 
bear taking some further notice of a 
passage already alluded to of Dr. 
Smith's: because, to my apprehen- 
sion, that passage seems to throw upon 
the subject a degree of obscurity, 
which I could wish to see cleared up, 
in a future edition of that valuable 
work. 

" No law," says he*, " can reduce 
" the common rate of interest below 

'' the 

* B. ii. c. 10. vol. ii. p. 45. edit. 8vo. 1784. 



anti-usurious Laws, &3 

^* the lowest ordinary market rate, at 
" the time when that law was made. 
" Notwithstanding the edict of 1766, 
" by which the French king attempted 
" to reduce the rate of interest from 
" five to four per cent., money conti- 
" nued to be lent in France at five per 
^^ cent, the law being evaded in several 
" different ways." 

As to the general position, if so it 
be, so much, according to me, the 
better: but I must confess I do not 
see why this should be the case. It 
is for the purpose of proving the truth 
of this general position, that the fact 
of the inefficacy of this attempt seems 
to be adduced : for no other proof 
is adduced but this. But, taking the 
fact for granted, I do not see how it 
can be sufficient to support the in- 
ference. The law, we are told at the 
same time, was evaded •, but we are 

not 



64 Lett. VII. Efficacy of 

not told how it came to be open to 
evasion. It might be owing to a 
particular defect in the penning of 
that particular law : or, what comes 
to the same thing, in the provisions 
made for carrying it into execution. 
In either case, it affords no support to 
the general position : nor can that 
position be a just one, unless it were 
so in the case where every provision 
had been made, that could be made, 
for giving efficacy to the law. For 
the position to be true, the case must 
be, that the law would still be broken, 
even after every means of what can 
properly be called evasion had been 
removed. True or untrue, the position 
is certainly not self-evident enough to 
be received without proof: yet nothing 
is adduced in proof of it, but the fact 
above-noticed, which we see amounts 
to no such thing. What is more, I 

should 



anti-usurious Laws, 65 

should not expect to find it capable of 
proof. I do not see, what it is, that 
should render the law incapable of 
" reducing the common rate of interest 
*^ below the lowest ordinary market 
" rate,** but such a state of things, 
such a combination of circumstances, 
as should afford obstacles equally pow- 
erful, or nearly so, to the efficacy of 
the law against all higher rates. For 
destroying the law's efficacy altogether, 
I know of nothing that could serve, 
but a resolution on the part of all per- 
sons any way privy not to inform : but 
by such a resolution any higher rate is 
just as effectually protected as any 
lower one. Suppose the resolution, 
strictly speaking, universal, and the 
law must in all instances be equally in- 
efficacious ; all rates of interest equally 
free; and the state of men's dealings 
in this way just what it would be, 

were 



66 Lett. VII. Efficacy of 

were there no law at all upon the sub- 
ject. But in this case, the position, in 
as far as it limits the inefficacy of the 
law to those rates which are below the 
*' lowest ordinary market rate," is not 
true. For my part, I cannot conceive 
how any such universal resolution could 
have been maintained, or could ever 
be maintained, without an open con- 
cert, and as open a rebellion against 
government ; nothing of which sort 
appears to have taken place : and, as 
to any particular confederacies, they 
are as capable of protecting any higher 
rates against the prohibition, as any 
lower ones. 

Thus much indeed must be admit- 
ted, that the low rate in question, viz. 
that which was the lowest ordinary 
market rate immediately before the 
making of the law, is likely to come 
in for the protection of the public 

against 



anti-usurious Laws, 67 

against the law, more frequently than 
any other rate. That must be the 
case on two accounts : first, because 
by being of the number of the ordi- 
nary rates, it was, by the supposition, 
more frequent than any extraordinary 
ones : secondly, because the disrepute 
annexed to the idea of usury, a force 
which might have more or less effi- 
cacy in excluding, from the protec- 
tion above spoken of, such extraor- 
dinary rates, cannot well be supposed 
to apply itself, or at least not in equal 
degree, to this low and ordinary rate. 
A lender has certainly less to stop him 
from taking a rate, which may be 
taken without disrepute, than from 
taking one, which a man could not 
take without subjecting himself to 
that inconvenience: nor is it likely, 
that men's imaginations and sentiments 
should testify so sudden an obsequious- 
ness 



68 Lett. VII. Efficacy of 

ness to the law, as to stamp disrepute 
to-day, upon a rate of interest to which 
no such accompaniment had stood an- 
nexed the day before. 

Were I to be asked how I imagined 
the case stood in the particular in- 
stance referred to by Dr. Smith : judg- 
ing from hrs account of it, assisted by 
general probabilities, I should answer 
thus; — The law, 1 should suppose, 
was not so penned as to be altogether 
proof against evasion. In many in- 
stances, of which it is impossible any 
account should have been taken, it was 
indeed conformed to : in some of those 
instances, people who would have lent 
otherwise, abstained from lending alto- 
gether; in others of those instances, 
people lent their money at the reduced 
legal rate. In other instances again, 
the law was broken : the lenders trust- 
ing, partly to expedients recurred to 

for 



anfi'Usurious Laws, 69 

for evading it, partly to the good faith 
and honour of those whom they had to 
deal with; in this class of instances it 
was natural, for the two reasons above 
suggested, that those where the old 
legal rate was adhered to, should have 
been the most numerous. From the 
circumstance, not only of their num- 
ber, but of their more direct repug- 
nancy to the particular recent law in 
question, they would naturally be the 
most taken notice of. And this, I 
should suppose, was the foundation in 
point of fact for the Doctor*s general 
position above-mentioned, that *^ no 
" law can reduce the common rate of 
" interest below the lowest ordinary 
" market rate, at the time when that 
** law was made." 

In England, as far as I can trust 
my judgment and imperfect general 
recollection of the purport of the 

laws 



70 Lett. VII. Efficacy of 

laws relative to this matter, I should 
not suppose that the above position 
would prove true. That there is no 
such thing as any palpable and uni- 
versally-notorious, as well as univer- 
sally-practicable receipt for that pur- 
pose, is manifest from the examples, 
which, as I have already mentioned, 
every now and then occur, of convic- 
tions upon these statutes. Two such 
receipts, indeed, 1 shall have occasion 
to touch upon presently; but they 
are either not obvious enough in their 
nature, or too troublesome or not ex- 
tensive enough in their application, 
to have despoiled the law altogether 
of its terrors or of its preventive effi- 
cacy. 

In the country in which I am writ- 
ing, the whole system of laws on this 
subject is perfectly, and very happily, 
inefficacious. The rate fixed by law 

is 



anti-usurious Laws. 71 

is 5 per cent. : many people lend mo- 
ney; and nobody at that rate: the 
lowest ordinary rate, upon the very 
best real security, is 8 per cent. ; 9, 
and even 10, upon such security, are 
common. Six or seven may have 
place, now and then, between rela- 
tions or other particular friends ; be- 
cause, now and then, a man may 
choose to make a present of one or 
two per cent, to a person whom he 
means to favour. The contract is re- 
newed from year to year : for a thou- 
sand roubles, the borrower, in his 
written contract, obliges himself to 
pay at the end of the year one thou- 
sand and fifty. Before witnesses, he 
receives his thousand roubles; and, 
without witnesses, he immediately 
pays back his 30 roubles, or his 40 
roubles, or whatever the sum may be, 
that is necessary to bring the real 

rate 



72 Lett. VII. Efficacy, 8(c. 

rate of interest to the rate verbally 
agreed on. 

This contrivance, I take it, would 
not do in England : but why it would 
not, is a question which it would be 
in vain for me to pretend, at this dis- 
tance from all authorities, to discuss. 



Lett. VI 1 1, Virtual Usury allowed. 73 



LETTER VIIL 

Virtual Usury allowed. 

Having proved, as I hope by this 
time, the utter impropriety of the law's 
limiting the rate of interest, in every 
case that can be conceived, it may be 
rather matter of curiosity, than any 
thing else, to inquire, how far the 
law, on this head, is consistent with 
itself, and with any principles upon 
Vi^hich it can have built. 

1. Drawing and re-drawifig is a 
practice, which it will be sufficient 
here to hint at. It is perfectly well 
known to all merchants, and may be 
so to all who are not merchants, by 
consulting Dr. Smith. In this way, 
E he 



74 Lett. VIII. Virtual 

he has shewn how money may be, and 
has been, taken up, at so high a rate, 
as 13 or 14 per cent.; a rate nearly three 
times as high as the utmost which the 
law professes to allow. The extra in- 
terest is, in this case, masked under the 
names of commission , and price of ex^ 
chanp'e. The commission is but small 
upon each loan; not more, I think, 
than one half per cent. : custom having 
stretched so far but no further, it might 
be thought dangerous, perhaps, to 
venture upon any higher allowance 
under that name. The charge, being 
repeated a number of times in the 
course of the year, makes up in fre- 
quency what it wants in weight. The 
transaction is by this shift rendered 
more troublesome, indeed, but not 
less practicable, to such parties as are 
agreed about it. But if usury is good 
for merchants, 1 don't very well see 

what 



Usury allowed, 7S 

what should make it bad for every 
body else. 

2. At this distance from all the 
fountains of legal knowledge, I will 
not pretend to say, whether the prac- 
tice of selling accepted bills at an under 
value, would hold good against all at- 
tacks. It strikes my recollection as a 
pretty common one, and I think it 
could not be brought under any of 
the penal statutes against usury. The 
adequateness of the consideration 
might, for ought I know, be attacked 
with success, in a court of equity; 
or, perhaps, if there were sufficient 
evidence (which the agreement of the 
parties might easily prevent) by an 
action at common law, for money had 
and received. If the practice be really 
proof against all attacks, it seems to 
afford an effectual, and pretty com- 
modious method of evading the re- 
E 2 strictive 



76 Lett. VIII. Virtual 

strictive laws. The only restraint is, 
that it requires the assistance of a 
third person, a friend of the borrower's; 
as for instance : jB, the real borrower, 
wants 1001. and finds U, a usurer, 
who is willing to lend it to him, at 10 
per cent. B has F, a friend, who has 
not the money himself to lend him, 
but is willing to stand security for 
him to that amount. J?, therefore, 
draws upon F, and F accepts a bill 
of lOOl. at 5 per cent, interest, pay- 
able at the end of a twelvemonth 
from the date. F draws a like bill 
upon B: each sells his bill to U for 
fifty pound: and it is endorsed to U 
accordingly. The 501. that F re- 
ceives he delivers over without any 
consideration to B, This transaction, 
if it be a valid one, and if a man can 
find such a friend, is evidently much 
less troublesome than the practice of 

drawing 



Usury allowed. 77 

drawing and re-drawing. And this, 
if it be practicable at all, may be 
practised by persons of any descrip- 
tion concerned or not in trade. Should 
the effect of this page be to suggest 
an expedient, and that a safe and 
commodious one, for evading the laws 
against usury, to some, to whom such 
an expedient might not otherwise have 
occurred, it will not lie very heavy 
upon my conscience. The prayers 
of usurers, whatever efficacy they may 
have in lightening the burthen, I hope 
I may lay some claim to. And I think 
you will not now wonder at my saying, 
that in the efficacy of such prayers I 
have not a whit less confidence than 
in that of the prayers of any other class 
of men. 

One apology I shall have to plead 
at any rate, that in pointing out these 
flaws, to the individual who may be 

disposed 



7S Lett.VIIL rirlual 

disposed to creep out at them, I point 
them out at the same time to the legis- 
lator, in whose power it is to stop 
them up, if in his opinion they re- 
quire it. If, notwithstanding such 
opinion, he should omit to do so, the 
blame will lie, not on my industry, but 
on his negligence. 

These, it may be said, should they 
even be secure and effectual evasions, 
are still but evasions, and, if charge- 
able upon the law at all, are charge- 
able not as inconsistencies but as over- 
sights. Be it so. Setting these aside, 
then, as expedients practised or practi- 
cable, only behind its back, I will 
beg leave to remind you of two 
others, practised from the day of its 
birth, under its protection and before 
its face. 

The first I shall mention is paivn- 
broking. In this case there is the less 

pretence 



Usurx/ allowed, 79 

pretence for more than ordinary in- 
terest, inasmuch as the security is, in 
this case, not only equal to, but bet- 
ter than, what it can be in any other : 
to wit, the present possession of a 
moveable thing, of easy sale, on which 
the creditor has the power, and cer- 
tainly does not want the inclination, 
to set such price as is most for his 
advantage. If there be a case in 
which the allowing of such extraor- 
dinary interest is attended with more 
danger than another, it must be this : 
"which is so particularly adapted to 
the situation of the lowest poor, that 
is, of those who, on the score of in- 
digence or simplicity, or both, are 
most open to imposition. This trade 
however the law, by regulating, avow- 
edly protects. What the rate of in- 
terest is, which it allows to be taken 
in this way, I cannot take upon me 

to 



80 Lett. VIII. Virtual 

to remember; but I am much de- 
ceived, if it amounts to less than 12 
per cent, in the year, and I beheve it 
amounts to a good deal more. Whe- 
ther it were 12 per cent, or 1200, I 
believe would make in practice but 
little difference. What commission is in 
the business of drawing and re-draw- 
ing, warehouse -room is, in that of 
pawnbroking. Whatever limits then 
are set to the profits of this trade, are 
set, I take it, not by the vigilancy of 
the law, but, as in the case of other 
trades, by the competition amongst the 
traders. Of the other regulations con- 
tained in the acts relative to this subject, 
I recollect no reason to doubt the use. 
The other instance is that of bot^ 
tomry and respondentia : for the two 
transactions, being so nearly related^ 
may be spoken of together. Bottomry 
is the usury of pawnbroking: respon^ 

dentia 



Usury allowed » 81 

dentia is usury at large, but com- 
bined in a manner with insurance, 
and employed in the assistance of a 
trade carried on by sea. If any spe- 
cies of usury is to be condemned, I 
see not on what grounds this particular 
species can be screened from the con- 
demnation. '^ Oh but" (says sir Wil- 
liam Blackstone, or any body else 
who takes upon himself the task of 
finding a reason for the law) ^\ this is 
" a maritime country, and the trade, 
" which it carries on by sea, is the great 
" bulwark of its defence." It is not 
necessary I should here enquire, whe- 
ther that branch, which, as Dr. Smith 
has shewn, is, in every view but the 
mere one of defence, less beneficial to 
a nation, than two others out of the 
four branches which comprehend all 
trade, has any claim to be preferred 
to them in this or any other way. I 
E 3 admit. 



82 Lett. VIII. Firtual 

admit, that the liberty which this 
branch of trade enjoys, is no more 
than what it is perfectly right it 
should enjoy. What I want to know 
is, what there is in the class of men, 
embarked in this trade, that should 
render beneficial to them, a liberty, 
which would be ruinous to every 
body else. Is it that sea adventures 
have less hazard on them than land 
adventures ? or that the sea teaches 
those, who have to deal with it, a de- 
gree of forecast and reflection which 
has been denied to landmen ? 

It were easy enough to give farther 
and farther extension to this charge of 
inconsistency, by bringing under it 
the liberty given to insurance in all 
its branches, to the purchase and sale 
of annuities, and of post-obits, in a 
word to all cases where a man is per- 
mitted to take upon himself an unli- 
mited 



Usury allowed. S5 

mited degree of risk, receiving for so 
doing an unlimited connpensation. 
Indeed I know not where the want 
of instances would stop me : for in 
what part of the magazine of events, 
about which human transactions are 
conversant, is certainty to be found ? 
But to this head of argument, this 
argument ad hominem, as it may be 
called, the use of which is but subsi- 
diary, and which has more of confuta- 
tion in it than of persuasion or instruc- 
tion, I willingly put an end. 



,84 Lett. IX. Blackstone considered, 

LETTER IX. 

Blackstone considered. 

1 Hope you are, by this time, at 
least, pretty much of my opinion, 
that there is just the same sortof harm^ 
and no other, in making the best terms 
one can for one's self in a money loan, 
as there is in any other sort of bargain. 
If you are not, Blackstone however is, 
whose opinion I hope you will allow to 
be worth something. In speaking of 
the rate of interest*, he starts a pa- 
rallel between a bargain for the loan 
of money, and a bargain about a horse, 
and pronounces, without hesitation, 
that the harm of making too good a 

bargain, 
* B. ii. cli. 30. 



Lett. IX. Blacks tone considered. 86 

bargain, is just as great in the one case, 
as in the other. As money-lending, 
and not horse-dealing, was, what you 
lawyers call, the principal case, he 
drops the horse-business, as soon as 
it has answered the purpose of illus- 
tration, which it was brought to serve. 
But as, in my conception, as well the 
reasoning by which he supports the 
decision, as that by which any body 
else could have supported it, is just as 
applicable to the one sort of bargain 
as to the other, I will carry on the 
parallel a little further, and give the 
same extent to the reasoning, as to the 
position which it is made use of to 
support. This extension will not be 
without its use^ for if the position, 
when thus extended, should be found 
just, a practical inference will arise; 
which is, that the benefits of these re- 
straints ought ^0 be extended from 

the 



86 Lett. IX. Blackstone considered. 

the money-trade to the horse-trade. 
That my own opinion is not favour- 
able to such restraints in either case, 
has been sufficiently declared ; but if 
more respectable opinions than mine 
are still to prevail, they will not be the 
less respectable for being consistent. 

The sort of bargain which the 
learned commentator has happened to 
pitch upon for the illustration, is in- 
deed, in the case illustrating, as in the 
case illustrated, a loan : but as, to my 
apprehension, loan or sale makes, in 
point of reasoning, no sort of differ- 
ence, and as the utility of the conclu- 
sion will, in the latter case, be more 
extensive, I shall adapt the reasoning 
to the more important business of sell- 
ing horses, instead of the less import- 
ant one of lending them. 

A circumstance, that would render 
the extension of these restraints to the 

horse- 



Lett. IX. Blackstone considered, 87 

horse-trade more smooth and easy, is, 
that in the one track, as well as in the 
other, the public has already got the 
length of calling names. Jockey-ship, 
a term of reproach not less frequently 
applied to the arts of those who sell 
horses than to the arts of those who 
ride them, sounds, I take it, to the 
ear of many a worthy gentleman, 
nearly as bad as usury : and it is well 
known to all those who put their trust 
in proverbs, and not less to those who 
put their trust in party, that when we 
have got a dog to hang, who is trou- 
blesome and keeps us at bay, whoever 
can contrive to fasten a bad name to 
his tail, has gained more than half 
the battle. I now proceed with my 
application. The words in italics are 
my own ; all the rest are Sir William 
Blackstone*s ; and I restore, at bot- 
tom. 



88 Lett. IX. Blackstone considered. 

torn, the words I was obliged to dis- 
card, in order to make room for mine. 

'' To demand an exorbitant price 
*' is equally contrary to conscience, 
'' for the loan of a horse, or for the 
" loan of a sum of money : but a rea- 
^^ sonable equivalent for the tempo- 
** rary inconvenience, which the own- 
'' er may fe^.l by the want of it, and 
** for tlie hazard of his losing it en- 
" tirely, is not more immoral in one 
" case than in the other. **** 

** As to selling horses ^ a capital dis- 
^^ tinction must be made, between a 
" moderate and an exorbitant profit : 
" to the former of which we give the 
*^ nsLtne o( horse- deali7ig*, to the latter 
** the truly odious appellation of joe- 
" key-ship f : the former is necessary 
<« in every civil state, if it were but to 

*' exclude 

* interest. f usury. 



Lett. IX. Blackstone considered, 89 

" exclude the latter. For, as the whole 
*^ of this matter is well summed up 
*' by Grotius> if the compensation 
*' allowed by law does not exceed 
" the proportion of the inconvenience 
** which it is to the seller of the horse to 
*^ part with it * , or the want which the 
" buyer has of it t, its allowance is 
** neither repugnant to the revealed 
" law, nor to the natural law : but 
** if it exceeds these bounds, it is 
" then an o^]}xess\\e jockey -ship j : and 
*^ though the municipal laws may give 
'* it impunity, they never can make it 
^^ust. 

" We see, that the exorbitance or 
*' moderation of the price given for a 
'^ horse § depends upon two circum- 
*' stances : upon the inconvenience of 

^' parting 

* hazard run. f felt by the loan, 1 usury. 
§ interest for the money lent. 



90 Lett. IX. Blackstone considered. 

" parting with the horse one has^y and 
*^ the hazard of not being able to meet 
" with such another 'I . The inconveni- 
*' ence to individual sellers of horses^, 
** can never be estimated by laws; the 
*^ general price for horses § must depend 
** therefore upon the usual or general 
" inconvenience. This results entirely 
** from the quantity of horses || in the 
^^ kingdom : for the more horses^ there 
" are running about ^^ in any nation, 
" the greater superfluity there will be 
** beyond what is necessary to carry on 
" the business of the mail coaches-\'\ and 
** the common concerns of life. In 
" every nation or public community 
" there is a certain quantity o^ horses J J 
*' then necessary, which a person well 
*^ skilled in political arithmetic might 

^' perhaps 

* it for the present. f losing it entirely, 

t lenders. § rate of general interest. || money. 
^ specie. ** circulating, ft exchange. 
^% money. 



Lett. IX. Blackstone considered. 91 

*' perhaps calculate as exactly as a pri- 
*^ vate horse-dealer* can the demand 
'/ for running horses in his own stables-f : 
" all above this necessary quantity 
" may be spared, or lent, or sold, with- 
" out much inconvenience to the re- 
*' spective lenders or sellers :- and the 
'* greater the national superfluity is, 
" the more numerous will be the sell- 
" ers J, and the lower ought the na- 
" tio?2al price of horse -flesh § to be ; 
" but where there are not enough, or 
*^ barely enough spare horses || to an- 
*^ swer the ordinary uses of the pub- 
*' lie, horseflesh ^ will be proportion- 
" ably high : for sellers ** will be but 
" few, as few can submit to the incon- 
** venience of selling -ff.** — So far the 
learned commentator. 

I hope 

* banker, f cash in his own shop. % lenders, 

§ the rate of the national interest. 

li circulating cash. ^ interest. ** lenders. 

ft lending. 



92 Lett. IX. Blackstone considered. 

I hope by this time you are worked 
up to a proper pitch of indignation, 
at the neglect and inconsistency be- 
trayed by the law, in not suppressing 
this species of jockey-ship, which it 
would be so easy to do, only by fixing 
the price of horses. Nobody is less 
disposed than I am, to be unchari- 
table ; but when one thinks of the 
1500/. taken for Eclipse, and 2000/. 
for Rockingham, and so on, who can 
avoid being shocked, to think how 
little regard those who took such 
enormous prices must have had for 
" the law of revelation and the law 
*' of nature ?'* Whoever it is that is 
to move for the municipal law, not 
long ago talked of, for reducing the 
rate of interest, whenever that motion 
is made, then would be the time for 
one of the Yorkshire members to get 
up,, and move, by way of addition, 

for 



Lett. IX. Blackstone considered, 93 

for a clause for fixing and reducing 
the price of horses. I need not expa- 
tiate on the usefulness of that valuable 
species of cattle, which might have 
been as cheap as asses before now, if 
our lawgivers had been as mindful of 
their duty in the suppression of /(JC^^j/- 
ship, as they have been in the sup- 
pression of usury. 

It may be said, against fixing the 
price of horse-flesh, that different 
horses may be of different values. I 
answer — and I think I shall shew you 
as much, when I come to touch upon 
the subject of champerty — not more 
different than the values which the 
use of the same sum of money may be 
of to different persons, on different 
occasions. 



94 Lett. X. Grounds of the 



LETTER X. 

Grounds of the Prejudices against Usury, 

It is one thing, to find reasons why- 
it is fit a law should have been made : 
it is another to find the reasons why it 
was made: in other words, it is one 
thing to justify a law : it is another 
thing to account for its existence. In 
the present instance, the former task, 
if the observations I have been trou- 
bling you with are just, is an impos- 
sible one. The other, though not 
necessary for conviction, may contri- 
bute something perhaps in the way of 
satisfaction. To trace an error to its 
fountain head, says Lord Coke, is to 

refute 



Prejudices against Usury. 95 

refute it; and many men there are who, 
till they have received this satisfaction, 
be the error what it may, cannot pre- 
vail upon themselves to part with it. 
*' If our ancestors have been all along 
^' under a mistake, how came they to 
" have fallen into it ?" is a question 
that naturally presents itself upon all 
such occasions. The case is, that in 
matters of law more especially, such is 
the dominion of authority over our 
minds, and such the prejudice it creates 
in favour of whatever institution it has 
taken under its wing, that, after all 
manner of reasons that can be thought 
of, in favour of the institution, have 
been shewn to be insufficient, we still 
cannot forbear looking to some unas- 
signable and latent reason for its effi- 
cient cause. But if, instead of any such 
reason, we can find a cause for it in 
some notion, of the erroneousness of 

which 



96 Lett. X. Grounds of the 

which we are already satisfied, then at 
last we are content to give it up with- 
out further struggle ; and then, and 
not till then, our satisfaction is com- 
plete. 

In the conceptions of the more con- 
siderable part of those through whom 
our religion has been handed down to 
us, virtue, or rather godliness, which 
was an improved substitute for virtue, 
consisted in self-denial : not in self-de- 
nial for the sake of society, but of self- 
denial for its own sake. One pretty 
general rule served for most occasions : 
not to do what you had a mind to do; 
or^ in other words, not to do what 
would be for your advantage. By 
this of course was meant temporal ad- 
vantage ; to which spiritual advantage 
was understood to be in constant and 
diametrical opposition. For, the proof 
of a resolution, on the part of a being 

of 



Prejudices against Usury, 97 

of perfect power and benevolence, to 
make his few favourites happy in a 
state in which they loere to be, was his 
determined pleasure, that they should 
keep themselves as much strangers to 
happiness as possible, in the state ia 
which they were. Now to get money 
is what most men have a mind to do : 
because he who has money gets, as far 
as it goes, most other things that he 
has a mind for. Of course nobody 
was to get money : indeed why should 
he, when he was not so much as to 
keep what he had got already ? To 
lend money at interest, is to get mo- 
ney, or at least to try to get it: of 
course it was a bad thing to lend mo- 
ney upon such terms. The better the 
terms, the worse it was to lend upon 
them : but it was bad to lend upon 
any terms, by which any thing could 
F be 



98 Lett. X. Grounds of the 

be got. What made it much the worse 
was, that it was acting like a Jew : for 
though all Christians at first were 
Jews, and continued to do as Jews 
did, after they had become Christians, 
yet, in process of time, it came to be 
discovered, that the distance between 
the mother and the daughter church 
could not be too wide. 

By degrees, as old conceits gave 
place to new, nature so far prevailed, 
that the objections to getting money 
in general, were pretty well over- ruled: 
but still this Jewish way of getting it^ 
was too odious to be endured. Chris- 
tians were too intent upon plaguing 
Jews, to listen to the suggestion of 
doing as Jews did, even though mo- 
ney were to be got by it. Indeed the 
easier method, and a method pretty 
much in vogue, was, to let the Jews 

get 



Prejudices against Usury. 99 

get the money any how they could, 
and then squeeze it out of them as it 
was wanted. 

In process of time, as questions of 
all sorts came under discussion, and 
this, not the least interesting, among 
the rest, the anti-Jewish side of it found 
no unopportune support in a passage 
of Aristotle : that celebrated heathen, 
who, in all matters wherein heathenism 
did not destroy his competence, had 
established a despotic empire over the 
Christian world. As fate would have 
it, that great philosopher, with all his 
industry, and all his penetration, not- 
withstanding the great number of 
pieces of money that had passed 
through his hands (more perhaps 
than ever passed through the hands 
of philosopher before or since), and 
notwithstanding the uncommon pains 
he had bestowed on the subject of ge- 
F 2 neration. 



100 Lett. X. Grounds of the 

neration, had never been able to dis- 
cover, in any one piece of money, any 
organs for generating any other such 
piece. Emboldened by so strong a body 
of negative proof, he ventured at last 
to usher into the v^^orld the result of his 
observations, in the form of an univer- 
sal proposition, that all money is in its 
nature barren. You, my friend, to 
whose cast of mind sound reason is 
much more congenial than ancient phi- 
losophy, you have, I dare to say, gone 
before me in remarking, that the prac- 
tical inference from this shrewd obser- 
vation, if it afforded any, should have 
been, that it w^ould be to no purpose 
for a man to try to get five per cent, 
out of money — not, that if he could 
contrive to get so much, there vj^ould 
be any harm in it. But the sages of 
those days did not viev^^ the matter in 
that light. 

A con- 



Prejudices against Usury, 101 

A consideration that did not liappen 
to present itself to that great philoso- 
pher, but which had it happened to 
present itself, might not have been 
altogether unworthy of his notice, is, 
that though a daric would not beget 
another daric, any more than it would 
a ram, or an ewe, yet for a daric which 
a man borrowed, he might get a ram 
and a couple of ewes, and that the 
ewes, were the ram left with them a 
certain time, would probably not be 
barren. That then, at the end of the 
year, he would find himself master of 
his three sheep, together with two, if 
not three, lambs ; and that, if he sold 
his sheep again to pay back his daric, 
and gave one of his lambs for the use 
of it in the mean time, he would be 
two lambs, or at least one lamb, 
richer than if he had made no such 



bargain. 



These 



102 Lett. X. Grounds of the 

These theological and philosophical 
conceits, the offspring of the day, were 
not ill seconded by principles of a 
more permanent complexion. 

The business of a money-lender, 
though only among Christians, and in 
Christian times, a proscribed profes- 
sion, has no where, nor at any time, 
been a popular one. Those who have 
the resolution to sacrifice the present 
to future, are natural objects of envy 
to those who have sacrificed the future 
to the present. The children who have 
eat their cake are the natural enemies 
of the children who have theirs. 
While the money is hoped for, and 
for a short tinne after it has been re- 
ceived, he who lends it is a friend and 
benefactor : by the time the money is 
spent, and the evil hour of reckoning 
is come, the benefactor is found to 
have changed his nature, and to have 

put 



Prejudices against Usury, 103 

put on the tyrant and the oppressor. It 
is an oppression for a man to reclaim his 
own money : it is none to keep it from 
him. Among the inconsiderate, that 
is, among the great mass of mankind, 
selfish affections conspire with the so- 
cial in treasuring up all favour for the 
man of dissipation, and in refusing jus- 
tice to the man of thrift who has sup- 
plied him. In some shape or other that 
favour attends the chosen object of it, 
through every stage of his career. 
But, in no stage of his career, can the 
man of thrift come in for any share of 
it. It is the general interest of those 
with whom a man lives, that his ex- 
pense should be at least as great as his 
circumstances will bear : because there 
are few expenses which a man can 
launch into, but what the benefit of 
it is shared, in some proportion or 
other, by those with whom he lives. 

In 



104 Lett. X. Grounds of the 

Iti that circle originates a standing 
law, forbidding every man, on pain of 
infamy, to confine his expenses within 
what is adjudged to be the measure of 
his means, saving always the power of 
exceeding that limit, as much as he 
thinks proper ; and the means assigned 
him by that law may be ever so much 
beyond his real means, but are sure 
never to fall short of them. So close 
is the combination thus formed be- 
tween the idea of merit and the idea 
of expenditure, that a disposition to 
spend finds favour in the eyes even of 
those who know that a man's circum- 
stances do not entitle him to the means : 
and an upstart, whose chief recom- 
mendation is this disposition, shall find 
himself to have purchased a permanent 
fund of respect, to the prejudice of the 
very persons at whose expense he has 
been gratifying his appetites and his 

pride. 



Prejudices against Usury, 105 

pride. The lustre, which the display 
of borrowed wealth has diffused over 
his character, awes men, during the 
season of his prosperity, into a sub- 
mission to his insolence : and when the 
hand of adversity has overtaken him at 
last, the recollection of the height, from 
which he has fallen, throws the veil of 
compassion over his injustice. 

The condition of the man of thrift 
is the reverse. His lasting opulence 
procures him a share, at least, of the 
same envy, that attends the prodigal's 
transient display : but the use he makes 
of it procures him no part of the fa- 
vour which attends the prodigal. In 
the satisfactions he derives from that 
use, the pleasure of possession, and the 
idea of enjoyingj at some distant pe- 
riod, which may never arrive, nobody 
comes in for any share. In the midst 
of his opulence he is regarded as a 
F 3 kind 



106 Lett. X. Grounds of the 

kind of insolvent, who refuses to ho- 
nour the bills, which their rapacity 
would draw upon him, and who is by 
so much the more criminal than other 
insolvents, as not having the plea of 
inability for an excuse. 

Could there be an}^ doubt of the dis- 
favour which attends the cause of the 
money-lender, in his competition with 
the borrower, and of the disposition 
of the public judgment to sacrifice the 
interest of the former to that of the 
latter, the stage would afford a com- 
pendious, but a pretty conclusive proof 
of it. It is the business of the drama- 
tist to study, and to conform to, the 
humours and passions of those, on the 
pleasing of whoin he depends for his 
success: it is the course which reflec- 
tion must suggest to every man, and 
which a man would naturally fall into, 
though he were not to think about it. 

He 



Prejudices against Usury, 107 

He may, and very frequently does, 
make magnificent pretences, of giv- 
ing the law to them : but woe be to 
him that attempts to give them any 
other law than what they are disposed 
already to receive. If he would at- 
tempt to lead them one inch, it must 
be with great caution, and not with- 
out suffering himself to be led by them 
at least a dozen. Now, I question, 
whether, among all the instances in 
which a borrower and a lender of mo- 
ney have been brought together upon 
the stage, from the days of Thespis to 
the present, there ever was one, in 
which the former was not recom- 
mended to favour in some shape or 
other, either to admiration, or to love* 
or to pity, or to all three; and the 
other, the man of thrift, consigned to 
infamy. 

Hence 



108 Lett. X. Grounds of the ' 

Hence it is that, in reviewing and 
adjusting the interests of these appa- 
rently rival parties, the advantage 
made by the borrow^er is so apt to sh'p 
out of sight, and that made by the 
lender to appear in so exaggerated a 
point of view. Hence it is, that though 
prejudice is so far softened as to ac- 
quiesce in the lender's making some 
advantage, lest the borrower should 
lose altogether the benefit of his assist- 
ance, yet still the borrower is to have 
all the favour, and the lender's advan- 
tage is for ever to be clipped, and 
pared down, as low as it will bear^ 
First it was to be confined to ten per 
cent, then to eight, then to six, then 
to five, and now lately there was a re- 
port of its being to be brought down 
to four; with constant liberty to sink 
as much lower as it would. The bur^ 

then 



* Prejudices against Usury. 109 

then of these restraints, of course, has 
been intended exclusively for the 
lender; in reality, as I think you 
have seen, it presses much more hea- 
vily upon the borrower : I mean him 
who either becomes, or in vain wishes 
to become so. But the presents di- 
rected by prejudice. Dr. Smith will 
teil us, are not always delivered ac- 
cording to their address. Jt was thus 
that the mill-stone designed for the 
necks of those vermin, as they have 
been called, the dealers in corn, was 
found to fall upon the heads of the 
consumers. It is thus — but further 
examples would lead me further from 
the purpose. 



110 Lett. XL Compound Intertst, 



LETTER XI. 

Compound Interest, 

A Word or two I must trouble you 
with, concerning compound interest ; 
for compound interest is discounten- 
anced by the law : I suppose, as a 
sort of usury. That, without an ex- 
press stipulation, the law never gives 
it, I well remember : whether, in case 
of an express stipulation, the law al- 
lows it to be taken, I am not absolute- 
ly certain. I should suppose it might : 
remembering covenants in mortgages 
that interest should become principal. 
At any rate, 1 think the law can- 
not well punish it under the name of 
usury. 

If 



Lett. XI. Compound Interest. Ill 

If the discountenance shewn to this 
arrangement be grounded on the hor- 
ror of the sin of usury, the impro- 
priety of such discountenance follows 
of course, from the arguments which 
shew the un-^' sinfulness of that sin,''' 

Other argument against it, I believe, 
was never attempted, unless it were 
the giving to such an arrangement the 
epithet of a hard one : in doing which, 
something more like a reason is given, 
than one gets in ordinary from the 
common law. 

If that consistency were to be found 
in the common law, which has never 
yet been found in man's conduct, and 
which perhaps is hardly in man's na- 
ture, compound interest never could 
have been denied. 

, The views which suggested this 
denial, were, I dare to say, very good ; 

the 



112 Lett. XI. Compound Interest. 

the effects of it are, I am certain, very 
pernicious. 

If the borrower pays the interest at 
the day, if he performs his engage- 
ment, that very engagement to which 
the law pretends to obhge him to con- 
form, the lender, who receives that in- 
terest, makes compound interest of 
course, by lending it out again, unless 
he chooses rather to expend it : he ex- 
pects to receive it at the day, or what 
meant the engagement ? if he fails of 
receiving it, he is by so much a loser. 
The borrower, by paying it at the 
day, is no loser : if he does not pay it 
at the day, he is by so much a gainer : 
a pain of disappointment takes place 
in the case of the one, while no such 
pain takes place in the case of the 
other. The cause of him whose con- 
tention is to catch a gain, is thus pre- 

ferred 



Lett. XL Compound Interest. 1 13 

ferred to that of him whose conten- 
tion is to avoid a loss : contrary to the 
reasonable and useful maxim of that 
branch of the common law which has 
acquired the name of equity. The 
gain, which the law in its tenderness 
thus bestows on the defaulter, is an 
encouragement, a reward, which it 
holds out for breach of faith, for 
iniquity, for indolence, for negli- 
gence. 

The loss, which it thu^ throws up- 
on the forbearing lender, is a punish- 
ment which it inflicts on him for his 
forbearance : the power which it gives 
him of avoiding that loss, by prose- 
cuting the borrower upon the instant 
of failure, is thus converted into a re- 
ward which it holds out to him for his 
hard-heartedness and rigour. Man is 
not quite so good as it were to be 
wished he were ; but he would be bad 

indeed. 



114 Lett. XI. Compound Liter est, 

indeed, were he bad on all the occa- 
sions where the law, as far as depends 
on her, has made it his interest so to 
be. 

It may be impossible, say you, it 
often is impossible, for the borrower 
to pay the interest at the day : and 
you say truly. What is the inference ? 
That the creditor should not have it in 
his power to ruin the debtor for not 
paying at the day, and that he should 
receive a compensation for the loss oc- 
casioned by such failure, — He has it 
in his power to ruin him, and he has 
it not in his power to obtain such 
compensation. The judge, were it 
possible for an arrested debtor to find 
his way into a judge's chamber instead 
of a spunging-house, might award a 
proper respite, suited to the circum- 
stances of the parties. It is not possi- 
ble : but a respite is purchased, proper 

or 



Lett. XI. Compound Interest. 115 

or not proper, perhaps at ten times, 
perhaps at a hundred times the ex- 
pense of compound interest, by put- 
ting in bail, and fighting the creditor 
through all the windings of mischiev- 
ous and unnecessary delay. Of the 
satisfaction due either for the original 
failure, or for the subsequent vexation 
by which it has been aggravated, no 
part is ever received by the injured 
creditor : but the instruments of the 
law receive, perhaps at his expense, 
perhaps at the debtor's, perhaps ten 
times, perhaps a hundred times the 
amount of that satisfaction. Such is 
the result of this tenderness of the 
Jaw. 

It is in consequence of such tender* 
ness that on so many occasions a man, 
though ever so able, would find him- 
self a loser by paying his just debts: 
those very debts of which the law has 

recognized 



116 Lett. XI. Compound Interest, 

recognized the justice. The man who 
obeys the dictates of common honesty^ 
the man who does what the law pre- 
tends to bid him, is wanting to him- 
self. Hence your regular and securely 
profitable writs of error in the House 
of Lords : hence your random and vin- 
dictive costs of one hundred pounds, 
and two hundred pounds, now and 
then given in that house. It is natu- 
ral, and it is something, to fmd, in a 
company of lords, a zeal for justice ; 
it is not natural, to find, in such a 
company, a disposition to bend down 
to the toil of calculation. 



Lett. XII. Maintenance, 8{c. 117 



LETTER XII. 

Maintenance and Champerty, 

Having in the preceding letters 
had occasion to lay down, and, as I 
flatter myself, to make good, the 
general principle, that no man of ripe 
years, and of sound mind, ought, out 
of loving kindness to him, to he hindered 
from making such bargain, in the way of 
obtaining money, as, acting with his eyes 
open, he deems conducive to his interest, 
I will take your leave for pushing it a 
little farther, and extending the appli- 
cation of it to another class of regula- 
tions still less defensible. I mean the 

antique 



118 Lett. XII. Maintenance 

antique laws against what are called 
Maintenance and Champerty. 

To the head oi Maintenance, I think 
you refer, besides other offences which 
are not to tlie present purpose, that 
of purchasing, upon any terms, any 
claim, which it requires a suit at law, 
or in equity, to enforce. 

Champerty, which is but a particu- 
lar modification of this sin of Mainte- 
nance, is, I think, the furnishing a 
man who has such a claim, with regard 
to a real estate, such money as he may 
have occasion for, to carry on such 
claim, upon the terms of receiving a 
part of the estate in case of success. 

What the penalties are for these 
offences I do not recollect, nor do I 
think it worth while hunting for them, 
though I have Blackstone at my elbow. 
They are at any rate, sufficiently se- 
vere 



and Champerty. 119 

vere to answer the purpose, the rather 
as the bargain is made void. 

To illustrate the mischievousness of 
the laws by which they have been 
created, give me leave to tell you a 
story, which is but too true an one, 
and which happened to fall within my 
own observation. 

A gentleman of my acquaintance 
had succeeded, during his minority, to 
an estate of about 3,000/. a year : I 
won't say where. His guardian, con- 
cealing from him the value of the 
estate, which circumstances rendered 
it easy for him to do, got a convey- 
ance of it from him, during his non- 
age, for a trifle. Immediately upon the 
ward's coming of age, the guardian, 
keeping him still in darkness, found 
means to get the conveyance confirm- 
ed. Some years afterwards, the ward 
discovered the value of the inheritance 

he 



120 Lett. XII. Maintenance 

he had been throwing away. Private 
representations proving, as it may be 
imagined, inefFectual, he applied to a 
court of equity. The suit was in some 
forwardness : the opinion of the ablest 
counsel highly encouraging : but mo- 
ney there remained none. We all know 
but too well, that, in spite of the un- 
impeachable integrity of the bench, 
that branch of justice, which is parti- 
cularly dignified with the name of 
equity, is only for those who can af- 
ford to throw away one fortune for the 
chance of recovering another. Two 
persons, however, were found, who, 
between them, were content to defray 
the expense of the ticket for this lot- 
tery, on condition of receiving half the 
prize. The prospect now became en- 
couraging : when unfortunately one 
of the adventurers, in exploring the 
recesses of the bottomless pit, happen- 
ed 



and Champerty. 121 

ed to dig up one of the old statutes 
against Champerty. This blew up the 
whole project : however the defend- 
ant, understanding that, some how or 
other, his antagonist had found sup- 
port, had thought fit in the mean time 
to propose terms, which the plaintiff, 
after his support had thus dropped from 
under him, was very glad to close with. 
He received, I think it was, 30001. : 
and for that he gave up the estate, 
which was worth about as much year- 
ly, together with the arrears, which 
were worth about as much as the 
estate. 

Whether, in the barbarous age 
which gave birth to these barbarous 
precautions, whether, even under the 
zenith of feudal anarchy, such fetter- 
ing regulations could have had reason 
on their side, is a question of curiosity 
rather than use. My notion is, that 
G there 



122 Lett. XII. Maint€7iancc 

there never was a time, that there ne- 
ver could have been, or can be a time, 
vi^hen the pushing of suitors away from 
court with one hand, while they are 
beckoned into it with another, would 
not be a policy equally faithless, in- 
consistent, and absurd. But, what 
every body must acknowledge, is, 
that, to the times which called forth 
these laws, and in which alone they 
could have started up, the present are 
as opposite as light to darkness. A 
mischief, in those times, it seems, but 
too common, though a mischief not to 
be cured by such laws, was, that a 
man would buy a weak claim, in 
hopes that power might convert it 
into a strong one, and that the sword 
of a baron, stalking into court with a 
rabble of retainers at his heels, might 
strike terror into the eyes of a judge 
upon the bench. At present, what 

cares 



and Champerty, 123 

cares an English judge for the swords 
of an hundred barons ? — Neither fear- 
ing nor hoping, hating nor loving, 
the judge of our days is ready with 
equal phlegm to administer, upon all 
occasions, that system, whatever it be, 
of justice, or injustice, which the law 
has put into his hands. A disposition 
50 consonant to duty could not have 
then been hoped for : one more con- 
sonant is hardly to be wished. Wealth 
has indeed the monopoly of justice 
against poverty : and such monopoly 
it is the direct tendency and necessary 
effect of regulations like these to 
strengthen and confirm. But with 
this monopoly no judge that lives 
now is at all chargeable. The law 
created this monopoly : the law, when- 
ever it pleases, may dissolve it. 

I will not however so far wander 

from my subject as to enquire what 

G 2 measure 



124 Lett. XII. Maintenance 

measure might have been necessary to 
afford a full rehef to the case of that 
unfortunate gentleman, any more than 
to the cases of so many other gentle- 
men who might be found, as unfortu- 
nate as he. I will not insist upon so 
strange and so inconceivable an ar- 
rangement, as that of the judge's see- 
ing both parties face to face in the first 
instance, observing what the facts are 
in dispute, and declaring, that as the 
fact^ should turn out this way or that 
way, such or such would be his decree. 
At present, I confine myself to the 
removal of such part of the mischief, 
as may arise from the general conceit 
of keeping men out of difficulties, by 
cutting them off from such means of 
relief as each man's situation may af- 
ford. A spunge in this, as in so ma- 
ny other cases, is the only needful, and 
only availing remedy : one stroke of 

it 



and Champerty. 125 

it for the musty laws against mainte- 
nance and champerty : another for the 
more recent ones against usury. Con- 
sider, for example, what would have 
respectively been the effect of two such 
strokes, in the case of the unfortunate 
gentleman I have been speaking of. 
By the first, if what is called equity 
has any claim to confidence, he would 
have got, even after paying of his 
champerty -usurers, 15001. a year in 
land, and about as much in money : 
instead of getting, and that only by an 
accident, 30001. once told. By the 
other, there is no saying to what a de- 
gree he might have been benefited. 
May I be allowed to stretch so far in 
favour of the law as to suppose, that 
so small a sum as 5001. would have 
carried him through his suit, in the 
course of about three years ? I am sen- 
sible, that may be thought but a short 

sum. 



126 Lett. XII. Maintenance 

sum, and this but a short term, for a 
suit in equity 3 but, for the purpose 
of illustration, it may serve as well as 
a longer. Suppose he had sought this 
necessary sum in the way of borrow- 
ing ; and had been so fortunate, or, as 
the laws against the sin of usury would 
stile it, so unfortunate, as to get it at 
200 per cent. He would then have 
purchased his 60001. a year at the price 
of half as much once paid, viz. 30001. i 
instead of selling it at that price. Whe- 
ther, if no such laws against usury had 
been in being, he could have got the 
money, even at that rate, I will not pre- 
tend to say : perhaps he might not 
have got it under ten times that rate, 
perhaps he might have got it at the 
tenth part of that rate. Thus far, I 
think, we may say, that he might, and 
probably would, have been the better 
for the repeal of those laws : but thus 

far 



and Champerty. 127 

far we must say, that it is impossible 
he should have been the worse. The 
terms, upon which he met with adven- 
turers wilHng to relieve him, though 
they come not within that scanty field, 
which the law, in the narrowness of its 
views, calls usury, do, in the present 
case, at twenty years purchase of the 
30001. a year he was content to have 
sacrificed for such assistance, amount, 
in effect, to 4000 per cent. Whether 
it was likely that any man, who was 
disposed to venture his money, at 
all, upon such a chance, would have 
thought of insisting upon such a rate 
of interest, I will leave you to ima- 
gine : but thus much may be said with 
confidence, because the fact demon- 
strates it, that, at a rate not exceeding 
this, the sum would actually have been 
supplied. Whatever becomes then of 
the laws against maintenance and 

champerty^ 



128 Lett. XIL Maintenance, 8(c. 

champerty, the example in question, 
when applied to the laws against usu- 
ry, ought, I think, to be sufficient to 
convince us, that so long as the ex- 
pense of seeking relief at law stands 
on its present footing, the purpose of 
seeking that relief will, of itself, inde- 
pendently of every other, afford a suf- 
ficient ground for allowing any man, 
or every man, to borrow money on any 
terms on which he can obtain it. 

Crichqf, ' 
in White Russia, 
March, 1787. 



LET- 



Lett. XIII. To Dr, Smith. 129 



LETTER XIII. 

To Dr, Smith, on Projects in Arts^ 8(c. 

SIR, 

I FORGET what son of controversy it 
was, among the Greeks, who having 
put himself to school to a professor 
of eminence, to learn what, in those 
days, went by the name of wisdom, 
chose an attack upon his master for the 
first public specimen of his profi- 
ciency. This specimen, whatever en- 
tertainment it might have afforded to 
the audience, afforded, it may be sup- 
posed, no great satisfaction to the mas- 
ter : for the thesis was, that the pupil 
G 3 owed 



130 Lett. XIII. To Dr. Smithy 

owed him nothing for his pains. For 
my part, being about to shew myself 
in one respect as ungrateful as the 
Greek, it may be a matter of prudence 
for me to look out for something like 
candour by way of covering to my in- 
gratitude: instead therefore of pre- 
tending to owe you nothing, I shall 
begin with acknowledging, that, as far 
as your track coincides with mine, I 
should come much nearer the truth, 
were I to say I owed you every thing. 
Should it be my fortune to gain any 
advantage over you, it must be with 
weapons which you have taught me to 
wield, and with which you yourself 
have furnished me : for, as all the great 
standards of truth, which can be ap- 
pealed to in this line, owe, as far as I 
can understand, their establishment to 
you, I can see scarce any other way of 
convicting you of any error or over- 
sight, 



on Projects in Arts, 8(c,- 131 

sight, than by judging you out of your 
own mouth. 

In the series of letters to which this 
will form a sequel, I had travelled 
nearly thus far in my researches into 
the policy of the laws fixing the rate of 
interest, combating such arguments as 
fancy rather than observation had sug- 
gested to my view, when, on a sud- 
den, recollection presented me with 
your formidable image, bestriding the 
ground over which I was travelling 
pretty much at my ease, and opposing 
the shield of your authority to any ar- 
guments I could produce. 

It was a reflection mentioned by Ci- 
cero as affording him some comfort, 
that the employment his talents till 
that time had met with, had been 
chiefly on the defending side. How 
little soever blest, on any occasion, with 
any portion of his eloquence, I may, 

on 



132 Lett. XIII. To Dr. Smith, 

on the present occasion, however, in- 
dulge myself with a portion of what 
constituted his comfort : for, if I pre- 
sume to contend with you, it is only 
in defence of what I look upon as, not 
only an innocent, but a most merito- 
rious race of men, who are so unfortu- 
nate as to have fallen under the rod of 
your displeasure. I mean projectors : 
under which invidious name I under- 
stand you to comprehend, in particu- 
lar, all such persons as, in the pursuit 
of wealth, strike out into any new 
channel, and more especially into any 
channel of invention. 
^ It is with the professed view of 
checking, or rather of crushing, these 
adventurous spirits, whom you rank 
with '' prodigals," that you approve 
of the laws which limit the rate of in- 
terest, grounding yourself on the ten- 
dency, they appear to you to have, to 

keep 



on Projects in ArtSy 8(c. 133 

keep the capital of the country out of 
two such different sets of hands. 

The passage, I am speaking of, is 
in the fourth chapter of your second 
book, volume the second of the 8vo. 
edition of 1784. " The legal rate," 
(you say) '^ it is to be observed, though 
" it ought to be somewhat above, 
" ought not to be much above, the 
" lowest market rate. If the legal rate 
'^ of interest in Great Britain, for ex- 
" ample, was fixed so high as eight or 
*^ ten per cent, the greater part of the 
'"^ money which was to be lent, would 
" be lent to prodigals and projectors, 
^* who alone would be willing to give 
^^ this high interest. Sober people, 
" who will give for the use of money 
" no more than a part of what they 
" are likely to make by the use of it, 
" would not venture into the compe- 
" tition. A great part of the capital 

'' of 



134 Lett. XIII. To Dr. Smithy 

" of the country would thus be kept 
" out of the hands which were most 
'^ likely to make a profitable and ad- 
" vantageous use of it, and thrown 
*' into those which were most likely to 
" waste and destroy it. Where the 
" legal interest, on the contrary, is 
*' fixed but a very little above the 
" lowest market rate, sober people are 
" universally preferred as borrowers, 
*' to prodigals and projectors. The 
" person who lends money, gets nearly 
'^ as much interest from the former, 
" as he dares to take from the latter, 
" and his money is much safer in the 
" hands of the one set of people than 
" in those of the other. A great part 
*' of the capital of the country is thus 
" thrown into the hands in which it 
" is most likely to be employed with 
*^ advantasre." 

It happens fortunately for the side 

you 



on Projects in Arts, S^c, 135 

you appear to have taken, and as un- 
fortunately for mine, that the appella- 
tive, which the custom of the language 
has authorized you, and v^^hich the po- 
verty and perversity of the language 
has in a manner forced you, to make 
use of, is one, which, along with the 
idea of the sort of persons in question, 
conveys the idea of reprobation, as in- 
discriminately and deservedly applied 
to them. With what justice or con- 
sistency, or by the influence of what 
causes, this stamp of indiscriminate re- 
probation has been thus affixed, it is 
not immediately necessary to inquire. 
But, that it does stand thus affixed, 
you and every body else, I imagine, 
will be ready enough to allow. This 
being the case, the question stands al- 
ready decided, in the first instance at 
least, if not irrevocably, in the judg- 
ments of all those, who, unable or un- 
willing 



13fi lAVrv.XUl. 'Jo Dr. Smith, 

willing to be al the puiriH of analy- 
sing tlieii' iileuH, Nufler their minds to 
be led eaptivt? by the tyranny of sounds ; 
that is, I doubt, of by far the greater 
proportion of those whom we are hkeiy 
to have to judge us. In tlie coneep- 
tionsofall such [lersons, to ask whether 
it be fit to r(^strail» [>rojeels and [iro- 
jectors, will b(* as mueh as to ask, 
whetlier it be fit to restrain rashness, 
and Tolly, and absurdity, and knavery, 
and waste. 

or prodigals I shall say no more at 
present. I have already stated my rea- 
sons for thinking that it is not among 
them that we arc to look for the na- 
tural customers for money at high 
rates of interest. As far as those rea- 
sons are conclusive, it v^ill follow, that, 
of the two sorts of men you mention 
as proper objects o( the burthen of 
tliese restraints, prodigals and jiroject- 

ors* 



the iMUST. A» to Vaemf what your de* 
tnHian m of ^iffteton, ^uad whaA de* 
fCff pCfoof ^ penan§ you mamt to m* 
dmde mder the ceamre conweyed hy 
tiuA tuunep migfai be vmUtM for the 
porpoie of jodgifij^ of the ^oj^rkiy €ii 
thai eemure, bat mMke$ no iAtet'- 
eoee m judgtog of tlie propricijr of 
the lair^ wbicfo tlial ccmT e u employ^ 
ed to justify^ Whether yom yamnH, 
were the tefenii dnuti ofpenomuuiie 
to Y9m before yom m rewtew, would 
he diepot e d to fkk out thk or th^ 
dam, or thie and that todswidtud, iu 
order to exempt them bom Midi eea^ 
erne, k what (or that furpote we bare 
no need to inquire. The law^ it is 

it hSU with eqnal weighty and with 
all ita weighty npon all thoie pertone. 
Without dMnetion, to whom the term 
f/rc^'ectors. In the mott unpartkd and 



158 Lett. XIII. To Dr. Smith, 

extensive signification of which it is 
capable, can be applied. It falls at 
any rate (to repeat some of the words 
of my former definition), upon all 
such persons, as, in the pursuit of 
wealth, or even of any other ob- 
ject, endeavour, by the assistance of 
wealth, to strike into any channel of 
invention. It falls upon all such per- 
sons, as, in the cultivation of any of 
those arts which have been by way of 
eminence termed useful, direct their en- 
deavours to any of those departments 
in which their utility shines most con- 
spicuous and indubitable ; upon all 
such persons as, in the line of any of 
their pursuits, aim at any thing that 
can be called improvement ; whether it 
consist in the production of any new 
article adapted to man*s use, or in the 
meliorating the quality, or diminishing 
the expense, of any of those which are 
already known to us. It falls, in 

short, 



011 Projects in Arts, 8(c. 139 

short, upon every application of the 
human powers, in which ingenuity 
stands in need of wealth for its as- 
sistant. 

High and extraordinary rates of in- 
terest, how little soever adapted to the 
situation of the prodigal, are certainly, 
as you very justly observe, particularly 
adapted to the situation of the pro» 
jector : not however to that of the im- 
prudent projector only, nor even to 
his case more than another's, but to 
that of the prudent and well-grounded 
projector, if the existence of such a 
being were to be supposed. Whatever 
be the prudence or other qualities of 
the project, in whatever circumstance 
the novelty of it may lie, it has this 
circumstance against it, viz. that it is 
new. But the rates of interest, the 
highest rates allowed, are, as you ex- 
pressly say they are, and as you would 
have them to be, adjusted to the situ- 
ation 



140 Lett. XIII. To Dr. Smith, 

ation which the sort of trader is in, 
whose trade runs in the old channels, 
and to the best security which such 
channels can afford. But in the na- 
ture of things, no new trade, no trade 
carried on in any new channel, can af- 
ford a security equal to that which 
may be afforded by a trade carried on 
in any of the old ones : in whatever 
light the matter might appear to per- 
fect intelligence, in the eye of every 
prudent person, exerting the best pow- 
ers of judging which the fallible con- 
dition of the human faculties affords, 
the novelty of any commercial adven- 
ture will oppose a chance of ill success, 
superadded to every one which could 
attend the same, or any other, adven- 
ture, already tried, and proved to be 
profitable by experience. 

The limitation of the profit that is 
to be made, by lending money to per- 
sons embarked in trade, will render the 

monied 



on Projects in Arts^ Kc, 141 

monied man more anxious, you may 
say, about the goodness of his secu- 
rity, and accordingly more anxious to 
satisfy himself respecting the prudence 
of a project in the carrying on of 
which the money is to be employed, 
than he would be otherwise : and in 
this way it may be thought that these 
laws ha'oe a tendency to pick out the 
good projects from the bad, and fa- 
vour the former at the expense of the 
latter. The first of these positions I 
admit : but I can never admit the 
consequence to follow. A prudent 
man, (I mean nothing more than a man 
of ordinary prudence) a prudent man 
acting under the sole governance of 
prudential motives, I still say will not, 
in these circumstances, pick out the 
good projects from the bad, for he 
will not meddle with projects at all. 
He will pick out old established trades 

from 



142 Lett. XIII. To Dr, Smith, 

from all sorts of projects, good and 
bad ; for with a new [)roject, be it ever 
so promising, he never will have any 
thing to do. By every man that has 
money, five per cent, or whatever be 
the highest legal rate, is at all times, 
and always will be, to be had upon the 
very best security, that the best and 
most prosperous old-established trade 
can afford. Traders in general, I be- 
lieve, it is commonly understood, are 
well enough inclined to enlarge their 
capital, as far as all the money they 
can borrow at the highest legal rate, 
while that rate is so low as 5 per 
cent, will enlarge it. How it is pos- 
sible therefore for a project, be it ever 
so promising, to afford, to a lender at 
any such rate of interest, terms equal- 
ly advantageous, upon the whole, with 
those he might be sure of obtaining 
from an old-established business, is 

more 



on Projects in ArLSy ^c. 1 43 

more tiian I can conceive. JLoariH of 
money may cortairjly cfiance, now and 
then, to fjtjfl tlicir way into the poc- 
kets of projectors as well as of other 
men : btit wlien this lja[*pens it must 
be througfi incautiousrjess, or friend- 
sliip, or tlje expectation of some colla- 
teral l>en(Tit, and not througli any 
idea of the advantageoubness of the 
transaction, in tlie light of a pecuniary 
hargait). 

I should not expect to see it alledgfd, 
that there is any thing that should 
render the number of well-grounded 
projects, in comparison of the ill- 
grounded, less in time future, than it 
has been in time past. 1 am sure at 
least that I know of no reasons why it 
should be so, though I know of some 
reasons, which 1 shall beg leave to sub- 
mit to you f)y and by, which appear to 

me 



144 Lett. XIII. To Dr, Smith, 

me pretty good ones, why the advan- 
tage should be on the side of futurity. 
But unless the stock of well grounded 
projects is already spent, and the whole 
stock of ill-grounded projects that 
ever were possible, are to be looked 
for exclusively in the time to come, 
the censure you have passed on projec- 
tors, measuring still the extent of it by 
that of the operation of the laws in the 
defence of which it is employed, looks 
as far backward as forward : it con- 
demns as rash and ill-grounded, all 
those projects, by which our species 
have been successively advanced from 
that state in which acorns were their 
food, and raw hides their cloathing, 
to the state in which it stands at pre- 
sent ; for think. Sir, let me beg of you, 
whether whatever is now the routine 
of trade was not, at its commence- 
ment. 



on Projects in Arts, SCc, 145 

ment, project? whether whatever is 
now establishment, was not, at one 
time, innovation ? 

How is it that the tribe of well- 
grounded projects, and of prudent pro- 
jectors (if by this time I may have 
your leave for applying this epithet to 
some at least among the projectors of 
time past), have managed to struggle 
through the obstacles which the laws 
in question have been holding in their 
way, it is neither easy to know, nor 
necessary to inquire. Manifest enough, 
I think, it must be by this time, that 
difficulties, and those not inconsider- 
able ones, those laws must have been 
holding up, in the way of projects of 
all sorts, of improvement (if I may say 
so) in every line, so long as they have 
had existence : reasonable therefore it 
must be to conclude, that, had it not 
been for these discouragements, pro- 
H ^'ects 



UG Lett. XIII. To Dr. Smit/i, 

jccts of all Horts, wc^ll-groiindcd and 
succeHHful onii.s, as well as oUuts, would 
hiivr. Ix'ori more numerous than tlicy 
liave been: and tlial a<:eonlingly, on 
llu; other liiind, us soon, i( (;ver, ajs th(;se 
diseonragenKuiLs KJiall Ix! removed, 
projects of all sorts, and arnon/^ the 
rest, well grounded and sueeeHsful 
ones, will he more; numerous th:in 
th(;y would otherwise have heen : in 
short, that, as, without these discou- 
ragements, th<; progn.'ss of mankind 
in the career of prosperity, wouhi have 
been greater than it has Ix^en und(;r 
them in tinui [)ast ; so, were tlxy to 
be removed, it would be at least jiro- 
portionably greater in time future. 

Tliat I had done you no injustice, 
in assigning to your idea of [jrojeetors 
so great a latitude, and that th(.' unfa- 
vourable opinion you have professed 
to entertain of them is not confined to 

tlie 



on Projects in Art.;, 5Cc. 147 

the above paft»ago, might he made, I 
think, pretty apparent, if it be mate- 
rial, by another passage in the tenth 
chapter of your first book,* ** The 
** ejitablinhment of any new manufac- 
*' ture, of any new branch of com- 
*' meree, or of any new practice in 
** agriculture;" all these you compre- 
henci by name under the li«t of *' pro- 
'' jects:'* of every one of them you ob- 
serve, that *' it h a (Speculation from 
*' which the proj(:rJ.or promises him«elf 
" extraordinary profits. 7"her^.e pro- 
*' fits (you a^ld) are .sometimes very 
** greaty and sometimes, more, frequently 
*' perhaps, they are <7M^^^r otkerwue: but 
" in general they bear no regular pro- 
*' portion Uj those of otlier old tradeu 
** in the neighbourhood. If the pro- 
" ject succeeds, they are commonly 

^ £ait. 17&4. 8vo. p, 177. 
H2I 



148 Lett. XIII. To Dr. Smith, 

" at first vesy high. When tho trade 
'* or practice becomes thoroutijlily es- 
" tahhshed and well known, the com- 
*^* petition reduces iheni to thc^ level of 
" otiier trades." lint on this head J 
forbear to insist: nor shouhJ I have 
taken this liberty of giving yon back 
your own words, but in the [lope of 
seeing some aheration made in them in 
your next edition, should 1 be fortunate 
enoui;h to find my sentiments confirm- 
ed by your*s. In other respects, what 
is essential to the pubhc, is, what the 
error is in the sentiments entertained, 
not who it is that entertains them. 

I know not whether the observations 
which I have been troubling you with, 
will be thou^dit to need, or whether 
they will be thought to receive, 
any additional support from those 
comfortable positions, of which you 
have made such good and such fre- 
quent 



on Project in ArtSy 8(c, 149 

quent use, concerning ih'^; constant 
temi^-ncy of mankind to ^f:t forward 
in the career of prosperity, the preva- 
lence of prudence over imprudence, 
in the sum of private conduct at least, 
and the superior fitness of individual* 
for managing their own pecuniary con- 
cerns, of which they know the parti- 
culars and the circumstances, in com- 
parison of the legislator, who can have 
no such knowledge. I will make the 
experiment: for, so long as I have the 
mortification to see you on the oppo- 
site side, 1 can never think the ground 
I have taken strong enough, while any 
thing remains that appears capable of 
rendering it still stronger. 

" With regard to misconduct, the 
*' numl>er of prudent and successful 
" undertakings ** [yon obs^:rve * '^ is 

* B. IL dL ill €dit. %ro. 17^, tU* u, p, 30, 

** every 



150 Lett. XIII. To Dr, Smith, 

** every where much greater than that 
" of injudicious and unsuccessful ones. 
** After all our complaints of the fre- 
*^ quency of bankruptcies, the unhap- 
*' py men who fall into this misfor- 
** tune make but a very small part of 
*' the whole number engaged in trade, 
** and all other sorts of business; not 
" much more perhaps than one in a 
" thousand/' 

'Tis in support of this position that 
you appeal to history for the constant 
and uninterrupted progress of man- 
kind, in our island at least, in the ca- 
reer of prosperity: calling upon any 
one who should entertain a doubt of 
the fact, to divide the history into any 
number of periods, from the time of 
Caesar's visit down to the present: pro- 
posing for instance the respective aeras 
of the Restoration, the Accession of 
Elizabeth^ that of Henry VII. the 

Norman 



on Projects in Arts^ 8(c. 151 

Norman Conquest, and the Heptar- 
chy; and putting it to the sceptic to 
find out, if he can, among all these 
periods, any one at which the condi- 
tion of the country was not more pros- 
perous than at the period immediately 
preceding it: spite of so many wars, 
and fires, and plagues, and all other 
public calamities, with which it has 
been at different times afflicted, whe- 
ther by the hand of God, or by the 
misconduct of the sovereign. No very 
easy task, I believe: the fact is too 
manifest for the most jaundiced eye to 
escape seeing it: — But what and whom 
are we to thank for it, but projects, 
and projectors? 

" No," I think I hear you saying, 
" I will not thank projectors for it, I 
" will rather thank the laws, which 
" by fixing the rates of interest, have 
" been exercising their vigilance in 

" repressing 



152 Lett. XIII. To Dr. Smith. 

" repressing the temerity of projectors, 
" and preventing their imprudence 
*^ from making those defalcations from 
" the sum of national prosperity, which 
*Mt would not have failed to make, 
" had it been left free. If, during all 
*^ these periods, that adventurous race 
" of men had been left at liberty by 
" the laws to give full scope to their 
" rash enterprizes, the increase of 
" national prosperity during these 
" periods might have afforded some 
*Vground for regarding them in a 
*^ more favourable point of view. But 
" the fact is, that their activity has 
" had these laws to check it ^ without 
" which checks you must give me 
" leave to suppose, that the current 
" of prosperity, if not totally stopt, or 
" turned the other way, would at any 
<^ rate have been more or less retard- 
«^ ed. Here then'* (you conclude) 

" lies 



on Projects in Arts, 8(c. 153 

** lies the difference between us. What 
" jou look upon as the cause of the 
*' increase about which we are both 
" agreed, I look upon as an obstacle 
*^ to it : and what you look upon as the 
" obstacle, I look upon as the cause." 

Instead of starting this as a sort of 
plea that might be urged by you, I 
ought, perhaps, rather to have men- 
tioned it as what might be urged by 
some people in your place: for as 1 do 
not imagine your penetration would 
suffer you to rest satisfied with it, still 
less can I suppose that, if you v^^ere 
not, your candour would allow you 
to make use of it as if you were. 

To prevent your resting satisfied 
with it, the following considerations 
w^ould, I think, be sufiicient. 

In the first place, of the seven pe- 
riods which you have pitched upon, 
as so many stages for the eye to rest 
H 3 at 



IM Lett. XIII. To Dr. Smith, 

at in viewing the progress of prospe- 
rity, it is only during the three last, 
that the country has had the benefit, 
if such we are to call it, of these laws : 
for it is to the reign of Henry VIII. 
that we owe the first of them. 

Here a multitude of questions might 
be started: Whether the curbing of 
projectors formed any part of the de- 
sign of that first statute, or whether 
the views of it were not wholly con- 
fined to the reducing the gains of that 
obnoxious and envied class of men, 
the money-lenders ? Whether projec- 
tors have been most abundant before 
that statute, or since that statute ? And 
whether the nation has suffered, as you 
might say — benefited, as I should say, 
most by them, upon the whole, dur- 
ing the former period or the latter ? 
All these discussions, and many more 
that might be started, I decline engag- 
ing 



on Projects in ArtSy 8(c. 155 

mg in, as more likely to retard, than 
to forward, our coming to any agree- 
ment concerning the main question. 

In the next place, I must here take 
the liberty of referring you to the 
proof, which I think I have already 
given, of the proposition, that the re- 
straints in question could never have 
had the effect, in any degree, of lessen- 
ing the proportion of bad projects to 
good ones, but only of diminishing, 
as far as their influence may have ex- 
tended, the total number of projects, 
good and bad together. Whatever 
therefore was the general tendency of 
the projecting spirit previously to the 
first of these laws, such it must have 
remained ever since, for any effect 
which they could have had in purify- 
ing and correcting it. 

But what may appear more satisfac- 
tory perhaps than both the above con- 
siderations. 



156 Licrr. XIII. To Dr. Smith, 

siderations, and may ailbrd us the 
best lu'lp towards extricating ourselves 
from the pcM'plexity, which the pha I 
have been combating (and which 1 
thought il necessary to bring to view, 
as the best tljat could be urged) seems 
much hitler (calculated to plunge us 
into, tlian bring us out of, is, the con- 
sideration of the small elVect which the 
gre^atest waste that can be conceived to 
have been made within any compass of 
time, by injudicious projects, can have 
iiad on the sum ol' prosperity, even in 
the estimation of those whose o[)inion 
is most unfavourable to projectors, in 
comparison of the effect which within 
the same compass of time must have 
been produced by prodigdlihj. 

Of the two causes, and only two 
causes, which you mention as contri- 
buting to retard the accumulation of 
national wealth, as far as the conduct 

of 



on Projects in Arts, Kr. 15? 

of individuals is concerned, project- 
ing, as 1 observed fielore, is the one, 
and prodigality is the other: but tlic 
detriment, which society can receive 
even irom the concurrent efhcacy of 
both these causes, yon represent on se- 
veral occasions, as inconsiderable; 
and, if I do not niisa|)prehend yon, 
too inconsiderable, either to need, or 
to warrant, the Interposition of govern- 
ment to oppose it. Be tliis as it may 
with regard to projecting and pro- 
digality taken together, witli regard 
to prodigality at least, 1 am certain I 
do not misapprehend you. On this 
subject yon ride trium[)hant, an<l 
chastise the ** impertinence and prc- 
** sumption of kings and ministers,'* 
with a tone of authority, which it re- 
quired a courage like yonr's to ven- 
ture upon, and a genius Jike your's 

to 



158 Lett. XIII. To Br. Smithy 

to warrant a man to assume.* After 
drawing the parallel between private 
thrift and public profusion, " It is" 
(you conclude) " the highest imper- 
" tinence and presumption therefore 
** in kings and ministers to pretend to 
" watch over the economy of private 
*' people, and to restrain their expense, 
*' either by sumptuary laws, or by 
'^ prohibiting the importation of fo- 
*^ reign luxuries. They are themselves 
** always, and without exception, the 
" greatest spendthrifts in the society. 
" Let them look well after their own 
" expense, and they may safely trust 
" private people with theirs. If their 
" own extravagance does not ruin the 
*^ state, that of their subjects never 
" will." 



* B. II. ch. iii. vol. ii. p. 27. edit. Svo. 1784. 

That 



on Projects in Arts, S^c. 159 

That the employing the expedients 
you naention for restraining prodiga- 
lity, is indeed generally, perhaps even 
without exception, improper, and in 
many cases even ridiculous. I agree 
with you : nor will I here step aside 
from my subject to defend from that 
imputation another mode suggested in 
a former part of these papers. But 
however presumptuous and imperti- 
nent it may be for the sovereign to at- 
tempt in any way to check by legal 
restraints X\ie prodigality of individuals, 
to attempt to check their had manage- 
ment by such restraints, seems abun- 
dantly more so. To err in the way of 
prodigality is the lot, though, as you 
well observe, not of many men, in 
comparison of the whole mass of man- 
kind, yet at least of any man : the stuff 
fit to make a prodigal of is to be found 
in every alehouse, and under every 

hedge. 



160 Lett. XIII. To Dr, Smith, 

hedge. But even to err in the way of 
projecting is the lot only of the privi- 
leged few. Prodigality, though not 
so common as to make any very ma- 
terial drain from the general mass of 
wealth, is however too common to be 
regarded as a mark of distinction or 
as a singularity. But the stepping 
aside from any of the beaten paths of 
traffic, is regarded as a singularity, as 
serving to distinguish a man from other 
men. Even where it requires no ge- 
nius, no peculiarity of talent, as where 
it consists in nothing more than the 
finding out a new market to buy or 
sell in, it requires however at least a 
degree of courage, which is not to be 
found in the common herd of men. 
What shall we say of it, where, in 
addition to the vulgar quality of cou- 
rage, it requires the rare endowment 
of genius, as in the instance of all those 

successive 



on Projects in Arts, 8(c. 161 

successive enterprises by which arts 
and ntianufactures have been brought 
from their original nothing to their 
present splendour ? Think how small 
a part of the community these must 
make, in comparison of the race of 
prodigals -, of that very race, which, 
were it only on account of the small- 
ness of its number, would appear too 
inconsiderable to you to deserve at- 
tention. Yet prodigality is essentially 
and necessarily hurtful, as far as it goes, 
to the opulence of the state : project- 
ing, only by accident. Every prodi- 
gal, without exception, impairs, by the 
very supposition impairs, if he does 
not annihilate, his fortune. But it 
certainly is not every projector that 
impairs his : it is not every projector 
that would have done so, had there 
been none of those wise laws to hin- 
der him : for the fabric of national 

opulence. 



162 Lett. XIII. To Dr. Smith, 

opulence, that fabric of which you 
proclaim, with so generous an exulta- 
tion, the continual increase, that fa- 
bric, in every apartment of which, 
innumerable as they are, it required 
the reprobated hand of a projector to 
lay the first stone, has required some 
hands at least to be employed, and 
successfully employed. When in com- 
parison of the number of prodigals, 
which is too inconsiderable to deserve 
notice, the number of projectors of 
all kinds is so much more inconsi- 
derable — and when from this incon- 
siderable number, must be deducted, 
the not inconsiderable proportion of 
successful projectors — and from this 
remainder again, all those who can 
carry on their projects without need of 
borrowing — think whether it be possi- 
ble, that this last remainder could af- 
ford a multitude, the reducing of which 

would 



on Projects in Arts, 8Cc. 163 

would be an object, deserving the in- 
terposition of government by its mag- 
nitude, even taking for granted that 
it v^ere an object proper in its na- 
ture ? 

If it be still a question, whether it 
be worth while for government, by its 
reason, to attempt to control the con- 
duct of men visibly and undeniably 
under the dominion of passion, and 
acting under that dominion, contrary 
to the dictates of their own reason ; in 
short, to effect what is acknowledged 
to be their better judgment, against 
what every body, even themselves, 
would acknowledge to be their worse : 
is it endurable that the legislator 
should by violence substitute his own 
pretended reason, the result of a mo- 
mentary and scornful glance, the off- 
spring of wantonness and arrogance, 
much rather than of social anxiety and 

study. 



164 Lett. XIII. To Dr. Smith, 

study, in the place of the humble rea- 
son of individuals, binding itself down 
with all its force to that very object 
which he pretends to have in view ? — 
Nor let it be forgotten, that, on the side 
of the individual in this strange com- 
petition, there is the most perfect and 
minute knowledge and information, 
which interest, the whole interest of a 
man's reputation and fortune, can en- 
sure : on the side of the legislator, the 
most perfect ignorance. All that he 
knows, all that he can know, is, that 
the enterprize is a project, which, mere- 
ly because it is susceptible of that ob- 
noxious name, he looks upon as a sort 
of cock, for him, in childish wanton- 
ness, to shie at. — Shall the blind lead 
the blind ? is a question that has been 
put of old to indicate the height of 
folly : but what then shall we say of 
him who, being necessarily blind, in- 
sists 



on Projects in Arts, 8(c. 165 

sists on leading, in paths he never trod 
in> those who can see ? 

It must be by some distinction too 
fine for my conception, if you clear 
yourself from the having taken, on 
another occasion, but on the very 
point in question, the side, on which 
it would be my ambition to see you 
fix. 

" What is the species of domestic 
'* industry which his capital can em- 
" ploy, and of which the produce is 
'* likely to be of the greatest value, 
*^ every individual " (you say*), " it 
" is evident, can, in his local situation, 
"judge much better than any states- 
*^ man or lawgiver can do for him. 
" The statesman, who should attempt 
" to direct private people in what 
" manner they ought to employ their 

* B. IV. ch. ii. vol. ii. p. 183, edit. 8vo. 

" capitals. 



166 Lett. XIII. To Dr. Smithy 

r " capitals, would not only load him- 
" self with a most unnecessary atten- 
*' tion, but assume an authority which 
*^ could safely be trusted, not only to 
** no single person, but to no council 
" or senate whatsoever, and which 
*^ would no where be so dangerous as 
*' in the hands of a man who had folly 
" and presumption enough to fancy 
** himself fit to exercise it. 

" To give the monopoly of the 
" home market to the produce of do- 
" mestic industry, in any particular 
*' art or manufacture, is in some mea* 
" sure to direct private people in what 
" manner they ought to employ their 
" capitals, and must in almost all cases 

, " be either a useless or a hurtful regu- 
" lation.** — Thus far you : and I add, 

I to limit the legal interest to a rate at 
which the carriers on of the oldest and 
best-established and least hazardous 

trades 



on Projects in Arts, 8(c, 167 

trades are always glad to borrow, is to 
give the monopoly of the money-mar- 
ket to those traders, as against the pro- 
jectors of new-imagined trades, not j 
one of which but, were it only from 1 
the circumstance of its novelty, must, 
as I have already observed, appear 
more hazardous than the old. 

These, in comparison, are but in- 
conclusive topics. I touched upon 
them merely as affording, what ap- 
peared to me the only shadow of a 
plea, that could be brought, in defence 
of the policy I am contending against. 
I come back therefore to my first 
ground, and beg you once more to 
consider, whether, of all that host of 
manufactures, which we both exult in ; 
as the causes and ingredients of na- I 
tional prosperity, there be a single one, 
that could have existed at first but in 
the shape of a project. But, if a re- 
gulation. 



168 Lett. XIII. To Dr. Smithy 

gulation, the tendency and effect of 
which is merely to check projects, 
in as far as they are projects, without 
any sort of tendency, as I have shewn, 
to weed out the bad ones, is defensible 
in its present state of imperfect effica- 
cy, it should not only have been de- 
fensible, but much more worthy of 
our approbation, could the efficacy of 
it have been so far strengthened and 
compleated as to have opposed, from 
the beginning, an unsurmountable bar 
to all sorts of projects whatsoever : 
that is to say, if, stretching forth its 
hand over the first rudiments of soci- 
ety, it had confined us, from the be- 
ginning, to mud for our habitations, 
to skins for our cloathing, and to 
acorns for our food. 

I hope you may by this time be 
disposed to allow me, that we have 
not been ill served by the projects of 

time 



on Projects in ArtSy Kc, 169 

time past. I have already intimated, 
that I could not see any reason why 
we should apprehend our being worse 
served by the projects of time future. 
I will now venture to add, that I 
think I do see reason, why we should 
expect to be still better and better 
served by these projects, than by those. 
I mean better upon the whole, in vir- 
tue of the reduction which experience, 
if experience be worth any thing, 
should make in the proportion of the 
number of the ill-grounded and unsuc- 
cessful, to that of the well-grounded 
and successful ones. 

The career of art, the great road 
which receives the footsteps of pro- 
jectors, may be considered as a vast, 
and perhaps unbounded, plain, be- 
strewed with gulphs, such as Curtius 
was swallowed up in. Each requires 
I an 



170 Lett.XIII. To Dr, Smith, 

an human victim to fall into it ere it 
can close; but when it once closes, it 
closes to open no more, and so much 
of the path is safe to those who fol- 
low. If the want of perfect informa- 
tion of former miscarriages renders the 
reality of human life less happy than 
this picture, still the similitude must 
be acknowledged : and we see at once 
the only plain and effectual method 
for bringing that similitude still nearer 
and nearer to perfection ; I mean, the 
framing the history of the projects of 
time past, and (what may be executed 
in much greater perfection, were but a 
finger held up by the hand of govern- 
ment) the making provision for re- 
cording, and collecting, and publishing 
as they are brought forth, the race of 
those with which the womb of futu- 
rity is still pregnant. But to pursue 

this 



o?i Projects in Arts, SCc, 1 7 ^ 

this idea, the execution of which is not 
within my competence, would lead me 
too far from the purpose. 

Comfortable it is to reflect, that this 
state of continually-improving secu- 
rity, is the natural state not only of 
the road to opulence, but of every 
other track of human life. In the war 
which industry and ingenuity main- 
tain with fortune, past ages of igno- 
rance and barbarism form the forlorn 
hope, which has been detached in ad- 
vance, and made a sacrifice of for the 
sake of future. The golden age, it is 
but too true, is not the lot of the ge- 
neration in which we live : but, if it 
is to be found in any part of the track 
marked out for human existence, it 
will be found, I trust, not in any part 
which is past, but in some part which 
is to come. 

But to return to the laws against 
I 2 usury. 



usury, ami their rcNtrainiuf^ inllueiicr 
on [>n>jt ('U)rN. I Imvo nuul<* il» 1 hope, 
pnlly appiiKu!, that these resiniintH 
huve no power or lenthMiey lo pick 
out bml projects iVom the good. Is it 
worth whiU^ to mhl, whiih I think 1 
way tU> witli sonu* Irulh, Uuit the* It n~ 
deuey of Iheni is nvlher lo piek the 
good out (roui the hiul ? Thus nuieli 
at kuist may be said, and it eoiiu s 
to the same thini;j, lliat llure is t)iu* 
case in whieh, he the projt et what it 
mtxy, they nuiy have \\\c elleet of 
chocking it, aiul another- in whieh th(\v 
Cftu luive no sneh t tVeet ; and tluit the 
first has tor its uccompaniment, and 
that a necessary i>ne, a eiren instance 
Avhicli has a strong tendency io 4i< pa- 
late anil ihscavd eve i y projetrt iA the 
injudicious stamp, hnt which is want- 
ing in the otht I- case. I mean, in a 
word, the benefit of discussion. 

It 



on Projects in Arh^^^c. 173 

It is evident enough, ihiit upon all 
such projects, whatever be their na- 
ture, as find fundn Kntticient to carry 
them on, in the hands of him whose 
invention gave th(Mn birth, tliesc laws 
are perfectly, and if by this time you 
will allow me to say so, very hfeppily, 
without power. But for these there 
1ms not necessarily been any other 
judge, prior to experience, than the 
inventor's own })artial aHcction. It is 
not only not necessary that they should 
have had, but it is natural enough 
that they should not have had, any 
such judge : since in most cases the 
advantage to be expected from the 
project depends upon the exclusive 
property in it, and consequently 
upon tlje conceahnent of the princi- 
ple. Thitik, on the oth(T hand, how 
different is the lot of tliat enterprise 
which depends upon the good opinion 

of 



I7i I.KTT. XIII. To lh\ Smith, 

of another man ; that other, a man })os- 
sesBed of the wealth which the projec- 
tor wants, and before whom necessity 
forces liim to a|)[)ear in the character 
of a supphant at U;ast : hap[)y if, in 
the imagination of his Jndt»;e, he adds 
not to that (higrading character, that 
of a visionary enthnsiast or an impostor ! 
At any rate, llieie are, in this ease, two 
wits, set to sift into the nurils of the 
project, for one, which was employed 
upon that same task in the other case : 
and of these two there is one, whose 
prejndices are certainly not most likely 
to he on the favonrable side. True 
it is, that in the jumble of occurrences, 
an over-sanguine projector may stum- 
ble upon a patron as over-sanguine as 
himself; and the wishes may bribe the 
judgment of the one, as they did of 
the other. The opposite case, how- 
ever, you will allow, I think, to be by 

much 



on Projects in Arlr.^ Kc. 17^ 

much the more nalurjil. Whatever a 
man's wishes may l>e for the .success of 
an enterprize not yet liis own, tiis fears 
are likely to be still stronger. That 
same pretty generally implanted prin- 
ciple of vanity and self-conceit, which 
disposes most of us to over- value each 
of us his own conceptions, disposes us, 
in a proportionable degree, to under- 
value those of other men. 

Is it worth adding, though it be 
undeniabjy true, that could it even be 
proved, by ever so uncontrovertible 
evidence, that, from the beginning of 
time to tlje present ^V^y^ there never 
was a project that did not terminate in 
the ruin of its author j not even from 
such a fact as this, could the legislator 
derive any sufficient warrant, so much 
as for wishing to see the spirit of pro- 
jects in any degree repressed ? — The 
discouraging motto, Sic vos non vohu, 

may 



175 Lett. XIII. To Dr, Smith, 

may be matter of serious consideration 
to the individual, but what is it to the 
legislator ? What general, let him at- 
tack with ever so superior an army, 
but knows that hundreds, or perhaps 
thousands, must perish at the first on- 
set ? Shall he, for that consideration 
alone, lie inactive in his lines? "Every 
" man for himself — but God,** adds 
the proverb (and it might have added 
the general, and the legislator, and all 
other public servants), " for us all.** 
Those sacrifices of individual to gene- 
ral welfare, which, on so many occa- 
sions, are made by third persons against 
men*s wills, shall the parties them- 
selves be restrained from making, when 
they do it of their own choice ? To tie 
men, neck and heels, and throw them 
into the gulphs I have been speaking 
of, is altogether out of the question : 
but if at every gulph a Curtius stands 

mounted 



on Projects in Arts, 8(c, 177 

mounted and caparisoned, ready to 
take the leap, is it for the legislator, in 
a fit of old womanish tenderness, to pull 
him away ? Laying even public interest 
out of the question, and considering 
nothing but the feelings of the indivi- 
duals immediately concerned, a legis- 
lator would >carcely do so, who knew 
the value of hope, " the most precious 
" gift of heaven.'* 

Consider, Sir, that it is not with the 
invention-lottery (that great branch of 
the project lottery, for the sake of 
which I am defending the whole, and 
must continue so to do until you or 
somebody else can shew me how to 
defend it on better terms), it is not I 
say with the invention-lottery, as with 
the mine-lottery, the privateering- 
lottery, and so many other lotteries, 
which you speak of, and in no instance, 
I think, very much to their advantage. 
I 3 In 



178 Lett. XIII. To Dr. Smith, 

In these lines, success does not, as in 
this, arise out of the embers of ill suc- 
cess, and thence propagate itself, by a 
happy contagion, perhaps to all eter- 
nity. Let Titius have found a mine, 
it is not the more easy, but by so much 
the less easy, for Sempronius to find 
one too : Let Titius have made a cap- 
ture, it is not the more easy, but by so 
much the less easy, for Sempronius to 
do the like. But let Titius have found 
out a new dye, more brilliant or more 
durable than those in use, let him have 
invented a new and more convenient 
machine, or a new and more profitable 
mode of husbandry ^ a thousand dyers, 
ten thousand mechanics, a hundred 
thousand husbandmen, may repeat and 
multiply his success: and then, what 
is it to the public, though the for- 
tune of Titius, or of his usurer, 

should 



on Projects in ArtSy 8Cc, 179 

should have sunk under the experi- 
ment ? 

Birmingham and Sheffield are pitch- 
ed upon by you as examples, the one 
of a projecting town, the other of an 
unprojecting one. * Can you forgive 
my saying, I rather wonder that this 
comparison of your own choosing, did 
not suggest some suspicions of the jus- 
tice of the conceptions you had taken 
up, to the disadvantage of projectors. 
Sheffield is an old oak : Birmingham, 
but a mushroom. What if we should 
find the mushroom still vaster and 
more vigorous than the oak ? Not but 
the one as well as the other, at what 
time soever planted, must equally 
have been planted by projectors : for 
though Tubal Cain himself were to 

be 

* B. I. ch. X. vol. i. p. 176. edit. 870. 1784, 



180 Lett. XIII. To Dr. Smithy 

be brought post from Armenia to 
plant Sheffield, Tubal Cain himself 
was as arrant a projector in his day, 
as ever Sir Thomas Lombe was, or 
Bishop Blaise: but Birmingham, it 
seems, claims in common parlance 
the title of a projecting town, to the 
exclusion of the other, because, being 
but of yesterday, the spirit of project 
smells fresher and stronger there than 
elsewhere. 

When the odious sound of the 
word projector no longer tingles in 
your ears, the race of men thus stig- 
matized do not always find you their 
enemy. Projects, even under the name 
of " dangerous and expensive experi- 
" ments," are represented as not unfit 
to be encouraged, even though mono- 
poly be the means : and the monopoly 
is defended in that instance, by its si- 
milarity 



on Projects in Arts, S(c, 181 

milarity to other instances in which 
the like means are employed to the 
like purpose. 

" When a company of merchants 

*' undertake at their own risk and ex- 

" pense to establish a new trade with 

*' some remote and barbarons nation, 

*' it may not be unreasonable" (you 

observe) " to incorporate them into 

** a joint-stock company, and to grant 

** them, in case of their success, a 

" monopoly of the trade for a certain 

*' number of years. It is the easiest 

" and most natural way, in which the 

*' state can recompense them, for ha- 

** zarding a dangerous and expensive 

*' experiment, of which the public is 

" afterwards to reap the benefit. A 

" temporary monopoly of this kind 

" may be vindicated, upon the same 

'' principles, upon which a like mon- 

" opoly of a new machine is granted to 

^'its 



18^ Lett.XIII. To Dr. Smith, 

" its inventor, and that of a new book 
*^ to its author." 

Private respect must not stop me 
from embracing this occasion of giv- 
ing a vi'arning, vi^hich is so much need- 
ed by mankind. If so original and 
independent a spirit has not been al- 
ways able to save itself from being 
drawn aside by the fascination of 
sounds, into the paths of vulgar pre- 
judice, how strict a watch ought not 
men of common mould to set over 
their judgments, to save themselves 
from being led astray by similar de- 
lusions ? 

I have sometimes been tempted to 
think, that were it in the.power of laws 
to "^mX xwrds under proscription, as it 
is to put men, the cause of inventive in- 
dustry might perhaps derive scarcely 
less assistance from a bill of attainder 
against the words project and projectors, 

than 



on Projects in Arts, 8(c, 183 

than it has derived from the act au- 
thorizing the grant of patents. I 
should add, however, for a time : for 
even then the envy, and vanity, and 
wounded pride, of the uningenious 
herd, would sooner or later infuse 
their venom into some other word, 
and set it up as a new tyrant, to hover, 
like its predecessor, over the birth of 
infant genius, and crush it in its cra- 
dle. 

Will not you accuse me of pushing 
malice beyond all bounds, if I bring 
down against you so numerous and re- 
spectable a body of men, as the mem- 
bers of the Society for the Encourage^ 
ment of Arts F 1 do not, must not, 
care : for you command too much re- 
spect to have any claim to mercy. At 
least you will not accuse me of spirit- 
ing up against you barbarian enemies, 

and 



184 Lett. XIII. To Dr, Smith, 

and devoting you to the vengeance of 
Cherokees and Chicasaws. 

Of that popular institution, the very 
professed and capital object is the 
encouragement of projects, and the 
jpropagating of that obnoxious breed, 
jthe crushing of which you commend 
las a fit exercise for the arm of power. 
fBut if it be right to crush the acting 
malefactors, it would be downright 
inconsistency not to crush, at the same 
time, or rather not to begin with 
crushing, these their hirers and abet- 
tors. Thank then their inadvertence, 
or their generosity, or their prudence, 
if their beadle has not yet received 
orders to burn in ceremony, as a libel 
on the society, a book that does ho- 
nour to the age. 

After having had the boldness to 
accuse so great a master of having 

fallen 



on Projects hi Arts, 8Cc, 185 

fallen unawares into an error^ ^^^y I 
take the still farther liberty, of setting 
conjecture to work to account for it ? 
Scarce any man, perhaps no man, can 
push the work of creation, in any line, 
to such a pitch of compleatness, as to 
have gone through the task of examin- 
ing with his own eyes into the grounds 
of every position, without exception^ 
which he has had occasion to employ. 
You heard the public voice, strength- 
ened by that of law, proclaiming all 
round you, that usury was a sad thing, 
and usurers a wicked and pernicious 
set of men : you heard from one at 
least of those quarters, that projectors 
were either a foolish and contemptible 
race, or a knavish and destructive one: 
Hurried away by the throng, and tak- 
ing, very naturally, for granted, that 
what every body said must have some 
ground for it, you have joined the cry, 

and 



186 Lett. XIII. To Dr. Smith, 

and added your suffrage to the rest. 
Possibly too, among the crowd of pro- 
jectors which the lottery of occurrences 
happened to present to your observa- 
tion, the prejudicial sort may have 
borne such a proportion to the bene- 
ficial, or shewn themselves in so much 
stronger colours, as to have given the 
popular notion a firmer hold in your 
judgment, than it would have had, had 
the contrary proportion happened to 
present itself to your notice. To al- 
low no more weight to examples that 
fall close under our eyes, than to those 
which have fallen at ever so great a 
distance — to suffer the judgment on no 
occasion to indulge itself in the licence 
of a too hasty and extensive generali- 
zation — not to give any proposition 
footing there, till after all such defal- 
cations have been made, as are neces- 
sary to reduce it within the limits of 

rigid 



on Projects in Arts^ 8(c. 187 

rigid truth — these are laws, the com- 
pleat observance whereof forms the ul- 
timate, and hitherto, perhaps for ever, 
ideal term of human wisdom. 

You have defended against unmerited 
obloquy two classes of men, the one 
innocent at least, the other highly use- 
ful 5 the spreaders of English arts in 
foreign climes, * and those whose in- 
dustry exerts itself m distributing that 
necessary commodity which is called 
by the way of eminence the staff of 
life. May 1 flatter myself with having 
succeeded at last in my endeavours, 
to recommend lo the same powerful 
protection, two other highly useful 
and equally persecuted sets of men, 
usurers and projectors. — Yes — I will, 
for the moment at least, indulge so 

flattering 

* B. IV. ch. viii. vol. ii. !>. 514. et alibi, ediU 
Svo. 1784. 



188 Lett. XIII. To Dr. Smith, 

flattering an idea; and, in pursuance 
of it, leaving usurers, for whom I have 
said enough already, I will consider 
myself as joined now with you in the 
same commission, and thinking with 
you of the best means of relieving the 
projector from the load of discourage- 
ment laid on him by these laws, in so 
far as the pressure of them falls parti- 
cularly upon him. In my own view 
of the matter, indeed, no tempera- 
ment, no middle course, is either ne- 
cessary or proper : the only perfectly 
effectual, is the only perfectly proper 
remedy, — a spunge. But, as nothing 
is more common with mankind, than 
to give opposite receptions, to con- 
clusions flowing with equal necessity 
from the same principle, let us ac- 
commodate our views to that con- 
tingency, 

According to this idea, the object, 

as 



on Projects in Arts, S>'c, 189 

as far as confined to the present case> 
should be, to provide, in favour of 
projectors onlj, a dispensation from 
the rigour of the anti-usurious laws : 
such, for instance, as is enjoyed by 
persons engaged in the carrying trade, 
in virtue of the indulgence given to 
loans made on the footing of respon- 
dentia or bottomry. As to abuse, I 
see not why the danger of it should be 
greater in this case than in those. Whe- 
ther a sum of money be embarked, or 
not embarked in such or such a new 
manufacture on land, should not, in its 
own nature, be a fact much more dif- 
ficclt to ascertain, than whether it be 
embarked, or not embarked, in such 
or such a trading adventure by sea ^ 
and, in the one case as in the other, 
the payment of the interest, as well as 
the repayment of the principal, might 
be made to depend upon the success 

of 



1 90 Lett. XUL To Dr. SmM, 

of the adventure. To confine the 
indulgence to new undertakings, tlic 
having obtained a patent for some in- 
vention, and the continuance of the 
term of the patent, migfit be made 
conditions of the allowance given to 
the bargain : to this might be added 
aflidavits, expressive of the intended 
application, and bonds, with sureties, 
conditionerl for tlie performance of 
the intention so declared ; to be regis- 
tered in one of the patent-offices, or 
elsewhere. After this, affidavits once a 
year, or oftener, during the subsistence 
of the contract, declaring what has 
been done in execution of it. 

If the leading-string is not yet 
thought tight enough, boards of con- 
troul might be instituted to draw it 
tighter. Then opens a scene of vexa- 
tion and intrigue: waste of time con- 
sumed in courting the favour of the 

members 



on Projects in ArU, Kc, JQl 

members of the board : wat^ of 
time in opening their under%tauding», 
clenched perhaps by ignorance, at any 
rate by disdain and self-sufficiency, 
and vanity, and pride: the favoor (for 
pride will make it a favour) granted 
to skill in the arts of self recommen- 
dation and cabal, devoid of in\entive 
merit, and refused to naked merit un- 
adorned by practice in those art^: 
waste of time on the part of the per- 
sons themselves engaged in this imper- 
tinent inquiry: waste of somebody's 
money in paying them for this waste 
of time. AH these may be necessary 
evils, where the money to be bestowed 
is public money : how idle where it is 
the party's own ! — I will not plague yoo, 
nor myself, with inquiring of whom 
shall be composed this board of nurses 
to grown gentlemen : were it only to 
cut the matter shorty one might name 

at 



192 Lett. XIII. To Dr. Smith, 

at once the committees of the Society 
of Arts* There you have a body of 
men ready trained in the conduct of 
inquiries, which resemble that in ques- 
tion, in every circumstance, but that 
which renders it ridiculous : the mem- 
bers or representatives of this demo- 
cratic body would be as likely, I take 
it, to discharge such a trust with fide- 
lity and skill, as any aristocracy that 
could be substituted in their room. 

Crichoff, 

in White Russia^ 

March, 1787. 



[ 193 ] 
LETTERS 

IN 

DEFENCE OF USURY, &c. 



CONTENTS. 
Lett. I. Introduction, 

The liberty of bargaining in money-matters, 
a species of liberty which has never yet found 
an advocate, p. 1 

Fixing the rate of interest, being a coercive 
measure, and an exception to the general 
rule in favour of the enforcement of contracts, 
it lies upon the advocates of the measure to 
produce reasons for it, p. 3 

List of the reasons which may be supposed to have 
operated in favour of it, p. 4 

Lett. II. Reasons for Restraint, — 

1. Prevention of Usury, 
Arguments in favour of the restraint. 1. Pre- 
K vention 



1 94 Letters in Defence of Usury. 

vention of Uwury. This begs the ques- 
tion, p. 7 

No one rate of interest is naturally more proper 
than another, p. 9 

No idea of propriety could liave been formed on 
this bead, but for custom, ibid. 

But the rate indicated by custom, varies from 
age to age, and from place to place, . p. 11 

Custom, being generated by convenience, evi* 
denced l>y consent, should submit to it 
throughout, p. 12 

No more reason for fixing the price of the use of 
money than the price of goods, . . p. 13 

—nor for fixing the rate on one side more than 
on the other — excepting a weak and distant 
one, * p. 15 

Lett. III. Reasons for Restraint. — 
2. Prevention of Prodigality. 

Interposing at all, to prevent prodigality, is not 
necessary to the existence of society, . p. 17 

—though it may be of use, choosing proper 
methods, p. 18 

This not of the number: 

1. Because borrowing at extraordinary rates 



C0NTEKT3. 195 

fit nalt a natural cour<« for prodi|^ U 
Uke, p. 18 

It if out of the qucftioo with re|;ard to^ 

«. Tbofe who haire OMfiejr of Uidr oirn, . p. If 

6. Tboce who hare real or f^ood tecnnty ta 
oflfer, i/^id* 

c. Of anj thiflg to idl, th<xjgh it b< bat a con- 

tingencjr, p.2f 

2. Tbote who hare no wlhcieDt tecar;^/ tr^ r/fit:f, 
are not more likdf to get money at aw extra- 
ordinary, thao at the ofdxoarj rat^, . p. 24 

What they do get, they get at the ordinary rate, 
of their Criendi, p. 2.5 

3, Prerenttog their geuing wnat tii*y want at 
a high rate;, in the way of borrowing, prereoti 
not their getting it in the way of taking up 
good* on credit/ p. 24 

Conclusion/ that the effect of the^e lawf with 
regard to p'odi^rality, as far ai it has any, if to 
increaae it, p. 30 

The only effeetoat ebeek to prodigality, an itiUr- 

^ic/, at voder the ILmiao law, ... p. SI 

K 9 Ultt 



196 Letters in Defence of Usury. 

Lett. IV. Reasons for Restraint, ^-^ 

3. Protection of Indigence, 

The advantage it may be of to a man to borrow 
money, an4 the need he may have of it, ad- 
mitting of an undetermined number of de- 
grees, so may the consideration he pays for 
it, p. 33 

No legislator can judge, so well as each indivi- 
dual for himself, whether money is worth to 
him any thing, and how much, beyond the 
ordinary interest, p. 37 

Repression of projectors. — This subject referred 
to the letter to Dr. Smith, . . . . p. 38 

Lett. V. Reasons for Restraint,— 

4. Protection of Simplicity, 

No simplicity short of idiotism can render an 
individual so bad a judge in this case as the 
legislator, ^ ... p. 39 

It would be to no purpose to prevent a man from 
being imposed upon in this way, unless he was 
prevented from being imposed upon in pur- 
chases and sales, . . . . . . . . ibid, 

A man 



CONTENTS. 197 

A man is not so liable to imposition in this way 
as in those, p. 41 

And in this way imprudence admits of a re- 
medy, which it does not in those others ; viz. 
borrowing at a lower rate to pay off the first 
loan, p. 44 

Lett. VI. Mischiefs of the anti-usu- 
rious Laics, 

Various ways in which the laws against usury 
may do mischief: 

1. By precluding many from assistance altoge- 
ther, p. 45 

S. Forcing men upon more disadvantageous 

ways of obtaining it, p. 47 

Detriment suffered in this way by many 

during the war, p. 49 

S. Or upon more disadvantageous terms in the 

very way forbidden, p. 53 

In as far as the law appears open to evasion^ 
it is either nugatory, or else mischievous, 
in any one of those three ways, accord- 
ing to circumstances, p. 56 

4. Exposing an useful class of men to unmerited 

suffering and disgrace, p. 57 

5. Encou- 



198 Letters in Defence of Usury, 

5. Encouraging and protecting treachery and 
ingratitude, p. 60 

Difference in this f-espect between the reward* 
held out to informers in this case, and those 
held out to infornners at large, . . . ibid. 

—or even to real criminals informing against 
accomplices, ibid. 

Caution against extending to those cases the cen- 
sure passed on this occasion, . . . . p. 61 

Lett. Vfl. Efficacy of the anti-usu^ 
rious Laws, 

Position of Dr. Smith's, that a law attempting to 
Teduce interest below a certain rate must be 
inefficacious, p. 63 

The position not warranted by the fact alleged 
in support of it, p. 63 

Nothing can destroy the efficacy of such restraint 
in regard to one rate of interest, that does not 
in regard to others, p. 65 

Why such destruction would be more apparent 
with regard to one rate than another, . p. 66 

Conjecture concerning the real state of the fact, 
in the instance alluded to by Dr. Smith, p. 68 

The 



CONTENTS. 199 

The English laws on this head how far open to 
evasion, p. 70 

Eussian laws, their perfect inefficacy on this 
head, p. 71 

Lett. VIII. Virtual Usury allowed. 

Cases where interest above the ordinary rate has 
been taken by evasion of the law : 

1. Drawinw and re-drawingf, . ... p. 73 

2. Selling bills of exchange at under price, p. 75 

Cases where it is taken by allowance of the 
law: 

I. Pawnbroking, . . ..... . p. 78 

S. Bottomry and respondentia, . . . p. 80 

Other cases more indirectly related to usury, such 
as insurance, buying annuities, &c. . p. 82 

Lett. IX. Blackstone considered. 

In Blackstone's opinion, the harm of making 
too hard a bargain stands on the same footing 
in the hire of a horse as of money, . p. 84 

If 



200 Letters in Defence of Usury. 

If so, consistency requires the subjecting botli 
businesses to the same restraints, . . p. 85 

Popular prejudice has got the length of giving 
bad names in both cases, P« 87 

Blackstone's reasoning concerning the money- 
trade appUed to the horse-trade . . . p. 88 

Proposal for fixing by law the same price for all 
horses, p. 93 

The values of horses differ not more than the 
value of money on different occasions . ibid, 

Lett. X. Grounds of the Prejudices 
against Usury, 

Causes of the discountenance shewn to the lender 
of money at interest : 

1. The prevalence of the ascetic principle among 
Christians, p. 96 

2. The horror of every thing Jewish, . . p, 98 

3. Aristotle's aphorism about the natural bar- 
renness of money, p. 99 

4. The motives, selfish as well as social, which 
concur in rendering the profuse character 
more amiable than the saving, . . . p. 103 

A proof 



CONTENTS. 201 

A proof of thisj the unfavourable light in which 
money-lenders, and other men of thrift, are 
always represented on the stage, . . p. 106 

Hence, even from legislators, the lender's inte- 
rest has met with less attention and favour 
than the borrower's, p. 107 

Yet by this partiality the parties meant to 
be favoured, have been the greatest suf- 
ferers, ; p. 109 

Lett. XI. Compound Interest, 

Compound interest, how far discountenanced by 
the law, p. 110 

No argument against it, but the notion of usury, 
or that of hardship, p. Ill 

Inconsistency and mischief of such discounte- 
nance, . ibid. 

The casual inability of the borrower is a reason, 
not for such discountenance, but for a respite, 
which the law never gives, , . . , p. 114 

Effects of such false tenderness in breeding mala 
fide delays . , . . p. 115 

K 3 Lett. 



202 Letters in Defence of Usury, 

Lett. XII. Maintenance and Cham- 
perty, 

Inexpediency of restraining men in their bar- 
gains for money, in the instance where the 
money is wanted for purchasing the assist- 
ance of the laws, p. 117 

Such bargains forbidden, by the laws against 
maintenance and champerty, . . p. 118 

Case of a gentleman who lost 30001. a year by 
those laws, p. 119 

Absurdity of continuing laws made to ob- 
viate a mischief of which no traces re- 
main, p. 121 

The above case may serve also to evince and il- 
lustrate the mischief of the laws restraining 
the rate of interest, p. 124 

Lett. XIII. To Dr. Smith, on Pro- 
jects in Arts, 8(c, 

Occasion of this address, .... p. 131 

The object of it, the defence of projectors, 

p. 132 

' Passage, 



CONTENTS. 203 

Passage, in which Dr. Smith approves of the law 
fixing the rate of interest, on account of its 
tendency to repress them, .... p. 133 
Prejudice under which they labour, . . p. 134 
The law, and therefore the censure past on them 
by the approbation given to that law, admits 
of no discrimination in favour of the innocent 
and meritorious, p. 136 

The projector cannot hope for money at the 
highest rate of interest at present legal, be- 
cause that may always be had with more safety 
from old-established trades, . . . . p. 140 

The censure on projectors necessarily involves the 
authors of all the arts to which the world owes 
its prosperity, p. 144 

And the laws, the approbation of which is con- 
nected with that censure, must, as far as their 
influence has extended, have operated as ob- 
stacles to that prosperity, .... p. 145 

Another passage, in which the censure passed 
on projectors is plainly extended to all im- 
provers, p. 147 

The censure passed on projectors is inconsist- 
ent with some fundamental ideas of Dr. 
Sqaith, . p. 148 

Concerning 



204 Letters in Defence of Usury. 

Concerning the natural prevalence of prudence 
over imprudence — even that which manifests 
itself in prodigality — and the progress of 
improvement which has been the conse- 
quence, .... p. 149 

Grounds for not attributing that prosperity 
to the operation of the laws in restraining 

projectors, p. 153 

Great advances in prosperity had been made 
prior to the earliest of those laws, . . p. 154 
That their tendency can only have been to 
lessen the total number of projectors, with- 
out lessening the proportion of bad to 

good, p. 155 

The greatest mischief that could have been done 
by projecting, if totally unrestrained, could 
not, according to Dr. Smith, warrant the in- 
terposition of the law, because, according to 
him, that done by prodigals does not warrant 

that interposition, p. 156 

But prodigality is at any rate much more cer- 
tainly ruinous, and much more common than 

projecting, p. 159 

In controling prodigality, the law controls pas- 
sion by reason : in controling projects, it 
controls knowledge by ignorance, . . p. 163 

Dr. 



CONTENTS. 205 

Dr. Smith condemns this latter interference also, 
in the censure he passes on the laws which 
attempt to direct individuals in their private 
concerns, p. 165 

The argument repeated— that the censure on pro- 
jects involves all past improvements, . p. 167 

But future projects, as such, must be less danger- 
ous than the past ones were, . . . p. 168 

The only case, in which the restraints applied by 
these laws to projects attaches upon them, is 
that in which they are best guarded against 
hazard, viz. by the necessity of their being 
discussed before a judge whose prepossession is 
rather on the other side, p. 171 

The ruin of every projector, without exception, 
would not be sufficient to disprove the utility 
of projects, p. 175 

Of two towns, instanced by Dr. Smith, that 
which is most of a projecting town is most 
prosperous, p. 179 

Approbation bestowed by Dr. Smith himself 
on projects, under another name, as also 
on other laws that favour them, a warn- 
ing to guard against the delusion of 

sounds, p., 180 

Censure 



206 Letters in Defence of Usury, 

Censure passed on projectors hostile to the object 

of the Society of Arts, p. 183 

Probable grounds of this censure : 

1. Popular opinion, as expressed by the bad 
sense contracted by the word *' Projector/' 

p. 185 

2. Too hasty generalization, ..... p. 186 
Hopes of his turning against the current of popu- 
lar prejudice, in this instance, grounded on the 
others in which he has done so^ . . . p. 187 

Expedients proposed for taking away the re- 
straint of the anti-usurious laws from proiectors 
only. 

1. Bonds and affidavits to secure the applying 
the money obtained at extra-interest to this 
use, . p. 190 

S. Boards to grant licences for that purpose; 
ex. gr. the Committees of the Society of 
Arts, ibid. 

This a bad and unnecessary expedient, . . ibicU 



FINIS. 



A PROTEST 

AGAI5ST 

LAW-TAXES, 

tBTWTSG THE 

PECULIAR MiscHn-vou^yrss 

OF 

ALL SUCH IMPOSITIONS 

THE EXPENSE 

or 

APFEAL TO JUSTICE. 



By JEREMY BESTHJM, 



A PROTEST 



AGA[NST 



L A W-T A XE S 



Taxes on law-proceedings consti- 
tute in many, and perhaps in all na- 
tions, a part of the resources of the 
state. They do so in Great Britain: 
they do so in Ireland. In Great Bri- 
tain, an extension of them is to be 
found among the latest productions 
of the budget : in Ireland, a further 
extension of them is among the mea- 
sures of the day. It is this impending 
extension that calls forth the publica- 
tion of the present sheets, the substance 

of 



4 To Contributors, 

of which has Iain upon the shelf thes^ 
many years. 

It is a well-known parliamentary 
saying, that he who reprobates a tax 
ought to have a better in his hand.* 
A juster condition never was imposed. 
I fulfil it at the first word. My bet- 
ter tax is any other that can be 

named. 

The people, when considered with a 
view to the manner in which they are 
affected by a tax of this description, 
may be distinguished into two classes: 
those who in each instance of requi- 
sition have wherewithal to pay, and 
those who have not : to the former, 
we shall find it more grievous than 

* It confines itself of course to public men, 
or what comes to the same thing, private men 
speaking in the character of public. As for in- 
dividuals aggrieved, they have performed their 
part vi^hen they have stated their own grievance. 

any 



A Tax upon Distress. 5 

any other kind of tax, to the latter a 
still more cruel grievance. 

Taxes on consumption cannot fall 
but where there is some fund to pay 
them : of poll taxes, and taxes on 
unproductive property, the great im- 
perfection is, that they may chance to 
bear where such ability may be want- 
ing. Taxes upon law-proceedings fall 
upon a man just at the time when 
the likelihood of his wanting that abi- 
lity is at the utmost. When a man sees 
more or less of his property unjustly 
withholden from him, then is the 
time taken to call upon him for an ex- 
traordinary contribution. When the 
back of the innocent has been worn 
raw by the yoke of the oppressor, then 
is the time which the appointed guar- 
dians of innocence have thus pitched 
upon for loading him with an extra- 
ordinary 



6 To Contributors^ 

ordinary burthen.* Most taxes are, 
as all taxes ought to be, taxes upon 
affluence : it is the characteristic pro- 
perty of this to be a tax upon distress. 

A tax on bread, though a tax on 
consumption, would hardly be reckon- 
ed a good tax ; bread being reckon- 
ed in most countries where it is used, 
among the necessaries of life. A tax 
on bread, however, would not be near 
so bad a tax as one on law-proceedings : 
A man who pays to a tax on bread, 
may, indeed, by reason of such pay- 
ment, be unable to get so much 
bread as he wants, but he will always 
get some bread, and in proportion as 
he pays more and more to the tax, he 

* Even in the instance of a defendant, or 
when the wrong is not pecuniary, the hardship 
of a double yoke does not cease : for the natural 
expense of Utigation is a burthen which this arti- 
ficial one finds pressing on him in any case. 

will 



A Tax upon Distress, 7 

will get more and more bread. Of a 
tax upon justice, the effect may be, 
that after he has paid the tax, he may, 
without getting justice by the pay- 
ment, lose bread by it: bread, the 
whole quantity on which he depended 
for the subsistence of himself and his 
family for the season, may, as well as 
any thing else, be the very thing for 
which he is obliged to apply to jus- 
tice. Were a three- penny stamp to be 
put upon every three-penny loaf, a 
man who had but three-pence to spend 
in bread, could no longer indeed get 
a three-penny loaf, but an obliging 
baker could cut him out the half of 
one. A tax on justice admits of no 
such retrenchment. The most oblig- 
ing stationer could not cut a man out 
half a latitat nor half a declaration. 
Half justice, where it is to be had, is 
better than no justice: but without 

buying 



S To Contributors^ 

buying the whole weight of paper, 
there is no getting a grain of justice. 

A tax on necessaries is a tax on this 
or that article, of the commodities 
which happen to be numbered among 
necessaries : a tax on justice is a tax 
on all necessaries put together. A 
tax on a necessary of life can only 
lessen a man's share of that particular 
sort of article : a tax on justice may 
deprive a man, and that in any pro- 
portion, of all sorts of necessaries. 

This is not yet the worst. It is not 
only a burthen that comes in the train 
of distress, but a burthen against which 
no provision can be made. 

All other taxes may be either fore- 
seen as to the time, or at any rate pro- 
vided for, where general ability is not 
wanting : in the instance of this tax, 
it is impossible to foresee the moment 
of exaction, it is eaually impossible to 

provide 



A Tax upon Distress, 9 

provide a fund for it. A tax to be 
paid upon the loss of a husband, or of 
a father on whose industry the family 
depended, a tax upon those who have 
suffered by fire or inundation would 
seem hard, and I know not that in fact 
any such modes of taxation have ever 
been made choice of: but a tax on 
law-proceedings is harder than any of 
these. Against all those misfortunes, 
provision may be made; it is actually 
made in different ways by insurance : 
and, were a tax added to them, pay so 
much more, and you might insure 
yourself against the tax. Against the 
misfortune of being called upon to in- 
stitute or defend one's self against a 
suit at law, there neither is nor can be, 
any office of insurance* 

• I say there never can be : in those other in- 
stances the event insured against is alvrays some 
very simple event, such as the death ©f a person, 

which 



lO To Non-Contrihutors^ 

Such is the cruelty of this species 
of tax, to those who have wherewithal 
to pay, and do pay to it accordingly. 
To those who do not, it is much more 
cruel : it is neither more nor less than a 
denial of justice. 

Justice is the security which the law 

which in the ordinary course of things is not 
open to dispute. Here the incident which calls 
for contribution, is not only disputable, but by 
the supposition is actually in dispute. Nothing 
less than litigation can ascertain legally, whether 
litigation has been necessary. Have you engaged 
with a man for his paying you a ^sum of money 
whenever it shall become necessary for you to in- 
stitute or defend yourself against a law-suit ?— 
wait till the suit is at an end, and you will know 
whether he ought to pay you. A society indeed, 
and a very laudable one, has been established for 
purposes which come under this head : but the 
relief it affords is confined not only to criminal 
cases, but to a certain description of criminal 
cases ; nor could it be rendered any thing like 
co-extensive with the grievance. 

provides 



A Denial of Justice, ~ 11 

provides us with, or professes to provide 
us with, for every thing we value, or 
ought to value ; for property, for li- 
berty, for honour, and for life. It is 
that possession which is worth all others 
put together: for it includes all others. 
^A denial of justice is the very quin- 
tessence of injury, the sum and sub- 
stance of all sorts of injuries. It is 
not robbery only, enslavement only, 
insult only, homicide only : it is rob- 
bery, enslavement, insult, homicide, 
all in one.# 

The statesman who contributes to 
put justice out of reach, the financier 
who comes into the house with a law- 
tax in his hand, is an accessary after 
the fact to every crime : every villain 
may hail him brother, every malefac- 
tor may boast of him as an accom- 
plice. To apply this to intentions 
would be calumny and extravagance. 
L But 



121 I To Non- Contributors, 

But as far as consequences only are 
concerned, clear of criminal consci- 
ousness and bad motives, it is incon- 
trovertible and naked truth. 

Outlawry is the engine applied by 
the law, as an instrument of compul- 
sion to those who fly from civil justice. 
Outlawry is the engine employed as 
an instrument of punishment, against 
the most atrocious of malefactors. 
This self-same load of mischief, the 
financier with perfect heedlessness, 
but with unerring certainty, heaps on 
the head of unsuspected innocence. 
Besides outlawry, which in the cases 
where the offender could not other- 
wise be affected, comes in as subsi- 
diary in lieu of other punishment, 
there are certain offences for which a 
man is subjected, expressly and in the 
first instance, to a similar punishment, 
under the name oi forfeiture of the pro- 

tection 



A Denial of Justice. 13 

tection of the law. The same fate at- 
tends a man thus at different periods, 
according to his merits. If guilty, it 
lays hold of him after conviction, for 
a particular cause, and without ex- 
cluding the hope of pardon : if inno« 
cent, and poor, and injured — before 
conviction, and without conviction, 
and for no cause at all, and as long as 
he continues poor, that is, as long as 
he lives. 

What a contrast ! What inconsist- 
ency ! The judge and the legislator, 
deliberating with all gravity, each in 
his separate sphere, whether to inflict 
or not this heavy punishment, on this 
or that guilty individual, or narrow 
description of guilty individuals. The 
legislator on the other hand, merely 
to get a little money which he 
could better get from any other 
source whatever, heaping the same 
L 2 . doom 



14 To Non-Contributors^ 

doom upon thousands, not to say mil- 
lions, of innocent and injured subjects, 
without consideration or remorse. 

Mark well, that 6f all sorts of men, 
it is the poor, and they the more cer- 
tainly in proportion to their poverty, 
that are despoiled in this way of the 
protection of the law: the protection 
of the law, that inestimable jewel, 
which in the language of that very 
law is defined the citizen's universal 
and best birth-right: the poor and 
him that has none to help him, these 
are they to whom the help of the law 
is thus unfeeHngly refused. The rich, 
were it from them that this great safe- 
guard were withholden, have shields 
of their own to ward off the attacks of 
injury : the natural influence of wealth, 
the influence of situation, the power 
of connexion, the advantages of edu- 
cation and intelligence, which go 

hand 



A Denial of Justice. 15 

hand in hand with wealth. The poor 
has but one strong hold, the protec- 
tion of the law : and out of this the 
financier drives him without vouch- 
safing him a thought, in company 
with the herd of malefactors. 

The poor, on account of the igno- 
rance and intellectual incapacity inse- 
parably attached to poverty, are de- 
barred generally, as perhaps it is ne- 
cessary, were it only for their own 
sake, they should be universally, from 
the sweets of political power : but are 
not so many unavoidable inequalities 
enough, without being added to by 
unnecessary injustice ? 

Such is the description of those 
from whom this sum total of all rights 
is torn away with one hand, while ten- 
dered with the other: what are their 
numbers in proportion to the sum to- 
tal of subjects ? I fear to say — perhaps 

tW0 



16 To Non-Contributors y 

two thirds, perhaps four fifths, per- 
haps nine tenths: but at the lowest 
computation a vast majority.* 

A third 

* In England, the expense of carrying through 
a common action, cannot be less than about 241. 
at the lowest rate, on the plaintiff's side alone. 
[See SchiefFer on Costs, 1792.] The average 
expense of civil suits of all sorts, taking equity 
causes into the account, can surely not be rated 
at less than double that amount, on that one 
side. The average expenditure of an English 
subject, infants and adults, rich as well as poor, 
taken together, has been computed by Davenant 
(as quoted on this occasion somewhere by Adam 
Smith) at 81. a year. Six years' income then is 
what a man must have in advance, before he can 
be admitted to take his chance for justice. Of 
many estimates which Dr. Anderson had met 
with, 201. was the highest, and he takes but ten 
pounds. [Interest of Great Britain with regard 
to her colonies, London, 1792.] No man then 
we may say at any rate, can have the benefit of 
justice, in the ordinary way, either in making 
good a just claim, or saving himself from an un- 
just 



A Denial of Justice, 17 

A third description of persons may 
jet be distinguished, whose condition 
under the system of law taxes is still 
more deplorable than that of either of 
the other two. I mean those, who 
having wherewithal to pay the impo- 
sition at the commencement of the 
suit, and during more or less of its 
progress, see their substance swallowed 
up by the taxes before the termination 
of it. The two preceding modifica- 
tions of abuse, either of them bad 
enough, are thus put together, and 
compounded into a third. 

Considered with a view to the treat- 
ment given to persons of this descrip- 

just one, who cannot find, for this purpose alone, 
a sum equal to several years of a man's income. 
From this statement it needs not much study to 
perceive, that for the bulk of the community, as 
far as ordinary cases of the civil kind are con- 
cerned, justice is but an empty name. 

tion 



18 They even deny Justice ^ 

tion, a court of justice is converted in- 
to exactly the same sort of place, as 
the shop of a baker would be, who 
having ranged his loaves along his 
window in goodly shew to invite cus- 
tomers, should, instead of selling them 
the bread they asked for, first rob 
them of their money, and then turn 
them out of doors. To an unpreju- 
diced imagination, the alliance be- 
tween justice and iinance, presents on 
this occasion a picture almost too near 
the truth to be termed an apologue. 
At the door of a house more preda- 
tory than any of those that are called 
houses of ill fame, the Judge in his 
robes presenting to unsuspecting pas- 
sengers a belt to prick in; the Lord 
High Treasurer in the back ground 
with his statV, lying in wait, ready as 
soon as the victims are fairly housed, 
and the money on the table, to knock 

them 



where they have taxed Distress, 19 

them down and run av/ay with it. The 
difTerence is, that any man may choose 
whether he will prick in the belt of 
the unhcensed sharper, nor are any 
but the rawest louts to be so deluded : 
whereas the wisest men may be invei- 
gled in, as well as the stoutest drag- 
ged in, by the exalted and commis- 
sioned phanderers so much surer 

is their game, — For were the Ji»t of 
law taxes ever so familiar, and ever so 
easy to be understood, it is impossible 
for a man to know before hand, whe- 
ther he has wherewithal to pay the 
bill, because it is impossible for him 
to know v/hat incidents may intervene 
to lengthen it. Were a man even to 
sit down, and form a resolution to sub- 
mit to every injury wiiich he could 
not afford to prosecute for, and to 
plead guilty to every accusation which 
he could not afford to defend himself 
L 3 against, 



20 They even deny Justice, 

against, even at this price he could 
not save himself from the hardship of 
paying for justice, aggravated by the 
still greater hardship of not getting it. 
If in all cases the practice is wicked, 
in some it is more particularly prepos- 
terous. In civil causes, and other 
causes where the injury to individuals 
affords a natural interest to prosecute, 
artificial expenses are cruelty and 
breach of faith : in a large class of pe- 
nal causes, in which for want of such 
natural interest, prosecutors must be 
engaged by factitious inducements, or 
the law be a dead letter, the cruelty 
and treachery are crowned by blunder 
and inconsistency. Beckoned into 
court with one hand, men are driven 
away with the other. But, costly as the 
attractive power frequently is, the re- 
pulsive force is apt to be much stronger. 
Keward is subsequent, distant, uncer- 
tain, and dependent upon success. 

^ Trouble 



zvhere they have taxed Distress. 21 

Trouble, expense, and odium, are cer- 
tain and precedent.* 

In favour of this species of imposi- 
tion 

* This species of tax would stand absolutely 
alone in point of depravity, were it not for the 
tax on drugs, as far it extends to those used in 
medicine. This, as being also a tax upon dis- 
tress, is so far in specie the same, but is nothing 
to it in degree. To recover a shilling in the 
way of justice, it will cost you at least 241., of 
which a good part in taxes : but to be admitted 
to buy a shilling's worth of medicine for a shil- 
ling, it does not cost you threepence. Hospi- 
tals for the sick are not uncommon : there are 
none for harassed and impoverished suitors. 
There are Lady Bountifuls that relieve the sick 
from the tax on medicines, and the price of them 
into the bargain : but a Lady Bountiful must be 
bountiful indeed, to take the place of attorney 
and counsel, as well as of physician and apothe- 
cary, and supply a poor man with as many 
pounds worth of latitats and pleas, as he must 
have to recover a shilling. A man cannot, as 
we have seen, insure himself against law suits : 
but a man may insure himself and many thou- 
sands actually do insure themselves, against sick- 
ness. But these reliefs are neither certain nor 

general : 



^^ They throw the Burthen, 

tion, I have seen two arguments pro- 
duced. 

One is, that in this case as in others, 
the burthen of an establishment ought 
to lie on those by whom the benefit is 
reaped. The principle is incontrover- 
tible : the matter of fact supposed by 
the application of it is not true. 

The argument, v^ere it just, would 
not extend beyond so much of the 
produce of the tax as is requisite for 
defraying the charge of this part of the 
national establishment. Whether it be 
confined or no within these bounds, 
was perhaps never thought worth in- 
quiring 

general : and after all, a tax on him who has 
had a leg or an arm broken, a tax on him who 
has had a fit of the ague, gout, rheumatism, or 
stone, will be the worst possible species of tax, 
next to a tax on justice. 

N. B. The tax on quack medicines, that ig, 
on unknown and unapproved medicines, leaving 
all known and approved ones untouched, falls in 
a less degree, if at all, under this censure. 



xvhere there is least Benefit, ^3 

quiring into, in any country where this 
tax was imposed. It certainly ex- 
tends much beyond them in England; 
and it seems to be resorted to from 
time to time, with as little scrupicj as 
an extension of the customs or excise* 
But let this pass. 

As to the notion of a connexity in 
this case betwixt the benefit and the 
burthen, it has been countenanced by 
an authority too respectable, not to 
deserve the most serious notice:* but 
come it from whom it will, it is a 
mere illusion. The persons on whortk 
the whole of the burthen is cast, are 
precisely those, who have the least en- 
joyment of the benefit : the security 
which other people enjoy for nothing, 
without interruption, and every mo- 
ment of their lives, they who are so 
unfortunate as to be obliged to go to 
* Dr, Adam Smith, Wealth of Nations. 

Jaw 



^4 They throxv tJ^e Burthen, 

law for it, are forced to purchase at an 
expense of time and trouble, in addi- 
tion to what pecuniary expense may 
be naturally unavoidable. Mean time, 
which is of most value ? w^hich most 
worth paying for ? — a possession thus 
cruelly disturbed, or the same posses- 
sion free from all disturbance ? — So 
far then from being made thus wan- 
tonly to pay an extra price, a man 
who stands in this unfortunate pre- 
dicament, ought rather to receive an 
indemnification at the public expense, 
for his time and trouble : and the dan- 
ger of insidious or collusive contests, 
in the view of obtaining such an in- 
demnity, is the only objection I can 
see, though perhaps a conclusive one, 
against the granting it. 

Litigation may in this point of 
view be compared to war in sober sad- 
ness, as war has been to litigation in 

the 



where there is least Benefit. 25 

the way of pleasantry. The suitor is 
the forlorn hope in this forensic war- 
fare. To throw upon the suitor the 
expense of administering justice, in 
addition to the trouble and the risk 
of suing for it, is as if, in case of an 
invasion, you were to take the inhabi- 
tants of the frontier and force them, 
not only to serve for nothing, but to 
defray of themselves the whole expen- 
diture of the war. 

What in our times is become inve- 
terate practice, is stigmatized as a 
species of iniquity without a prece- 
dent, by Saint Paul. " Who is therCy^ 
demands the Apostle, *' xvho is there 
that ever goes to war at his own 
charge /'* — " Alas /" cries the poot 
suitor, 'rl do:' 

The other argument in favour of a 
set of taxes of this kind, is, that they 
are a check to litigation. 

Litigation is a term not altogether 

free 



26 No Check to Lltigionsness, 

free from ambiguity. It is used some- 
times in a neutral sense, to denote 
the prosecuting or defending a suit, 
though perhaps more frequently in a 
bad one. In its neutral sense, it ex- 
presses the irreproachable exercise of 
an essential right : in a bad sense a 
species of misconduct practised under 
the notion of exercising such a right. 

In the first sense, taxes can never 
have been recommended by any man 
as a check to litigation : in this sense, 
an avowed desire of checking litiga- 
tion, would be neither more nor less 
than an avowed desire of denying jus- 
tice. 

In a bad sense again, the word 
is used on two different occasions : 
where the suit, whatever be the import- 
ance of the matter in dispute, is on 
the part of the person spoken of as 
maintaining it, a groundless one : and 

where 



but an Encouragement. 27 

where the suit, however well-grounded 
on his part in point of title, is on ac- 
count of the supposed unimportance 
of the matter in dispute, deemed a. fri- 
volous, a trifling i a trivial one : and in 
either case, it is of course applicable 
to the situation of either plaintiff or 
defendant; though it is apt to fix in 
the first instance and most readily up- 
on the situation of the plaintiff, as be- 
ing the party, who by taking the first 
step on the commencement of the suit, 
exhibits himself as the author of it. 

On either side, litigation, when 
groundless, may be accompanied or 
not, with what the lawyers call in 
genere malitia, meaning conscioiisness of 
misdoing, and in this particular case 
mala fides, consciousness of the ground- 
lessness of the action or defence, con- 
sciousness of the want of merits. 

Where merits are wanting, but 

there 



Q8 No Check to Litigious?iess. 

there exists no consciousness of the 
want, taxes on law-proceedings do, it 
must be confessed, operate as a check 
to litigation 5 and that as well on the 
side where it is groundless as on that 
where it is well grounded, and in the 
same degree. Indeed as both of two 
contending parties cannot in point of 
law be actually in the right, though 
either or both may think themselves 
so, the impediment cannot operate to 
the denial of justice, but it must ope- 
rate to the prevention of groundless li- 
tigation at the same time. Prevent 
him who is in the right from institut- 
ing a suit, you prevent him who is in 
the wrong from defending one. But 
neither is litigation prevented, any 
further than as justice is denied. So 
far then as this case extends, it is still 
but the other side of the same effect, 
the denial of justice. 

Have 



but an Encouragement. 29 

Have they then any peculiar ten- 
dency to operate as a check to litiga- 
tion, when it is not only groundless, 
but accompanied with a consciousness 
of its being so ? — to malitious, or as it 
might with more propriety be termed, 
anti-conscientious litigation? On the 
contrary, their direct tendency and 
sure effect is to promote it. 

They produce it on the part of 
the plaintiff, — Were proceedings at 
law attended with no expense nor 
other inconvenience, till the suit were 
heard and at an end, a plaintiff who 
had no merits, could do a defendant 
man no harm by suing him : he could 
give him no motive for submitting to 
an unfounded claim : malice would 
have no weapons : oppression would 
have no instrument. When proceed- 
ings are attended with expense, the 
heavier that expense, the greater of 

course 



So Ko Check to Litigiousness, 

course is the mischief which a man 
who has no merits is enabled to do ; 
the sharper the weapon thus put into 
the hand of malice, the more coercive 
the instrument put into the hand of the 
oppressor. 

They produce it on the part of the 
defendant. Were proceedings at law 
attended with no expense, a defendant 
who knew he had no merits, a defen- 
dant who was conscious that the de- 
mand upon him was a just one, would 
be deprived of what is in some cases his 
best chance for eluding justice, in 
others the absolute certainty of so do- 
ing: he would lose the strongest in- 
centive he has to make the attempt. 
A defendant who means not to do 
justice unless compelled, and who 
knows that the plaintiff cannot com- 
pel him without having advanced a 
certain sum ; such a defendant, if he 

thinks 



hut an Encouragement, 31 

thinks his adversary cannot raise that 
sum, will persevere in refusal till a suit 
is commenced, and in litigation after- 
wards. 

Whether they make the litigation, 
or whether they find it ready made, 
they shew most favour to the side on 
which anti-conscientious litigation is 
most likely to be found. By at- 
taching on the commencement of the 
suit, they bear hardest upon the plain- 
tiff, or him who, if they would have suf- 
fered him, would have become plaintiff. 
In so doing they favour in the same 
degree the defendant, or him who, 
if the party conceiving himself injured, 
could have got a hearing, would have 
been called upon to defend himself. 
But it is on the defendant's side that 
anti-conscientious practice is most 
likely to be found. Setting expense 
out of the question, an evil of which 

these 



3^ No Check to Litigiousness. 

these laws are thus far the sole cause, 
setting out of the question the imper- 
fections of the judicial system, and 
the hope of seeing evidence perish, 
or the guilty view of fabricating it, a 
man wnll find no motive for institu- 
ting a suit for an ordinary pecuniary 
demand, without believing himself to 
be in the right : for if he is in the 
wrong, disappointment, waste of time, 
fruitless trouble, and so much ex- 
pense as is naturally unavoidable, 
are by the supposition what he knows 
must be his fate. Whereas, on the 
other hand, a man upon whom a de- 
mand of that kind is made, may, 
although he knows himself to be in 
the wrong, find inducement enough 
to stand a suit from a thousand other 
considerations : from the hope of a 
deficiency in point of evidence on the 
part of the plaintiff, not to mention, 

as 



but an Encouragement, 33 

as before, the rare and criminal enter- 
prise of fabricating evidence on his 
own part : from the hope of tiring the 
plaintiff out, or taking advantage of 
casual incidents, such as the death of 
vt^itnesses or parties : from the tempo- 
rary difficulty or inconvenience of sa- 
tisfying the demand, or (to conclude 
with the case which the weakness of 
human nature renders by far the most 
frequent) from the mere unwillingness 
to satisfy it. 

In a word, they give a partial ad- 
vantage to conscious guilt, on which- 
ever side it is found: and that advan- 
tage is most partial to the defendant's 
side, on which side consciousness of 
guilt, as we see, is most likely to be 
found. 

Better, says a law maxim subscribed 
to by every body, better that ten cri- 
minals should escape, than one inno- 
cent 



34 No Check to Lifigiousness, 

cent person should suffer : and this in 
case even of the deepest guilt. For ten, 
some read a hundred^ some a thousand. 
Whichever reading be the best, an ex- 
pedient of procedure, the effect of 
which were to cause ten innocent per- 
sons to suffer for every ten guilty ones, 
would be acknowledged to be no very 
eligible ingredient in the system. 
What shall we say of an institution, 
which for one culpable person whom 
it causes to suffer, involves in^ equal 
suffering perhaps ten blameless ones. 

Thus much for groundless suits : 
there remains the plea of its tendency 
to check what are deemed trivial suits. 

I know what a groundless suit means 
— I know of no such thing as a frivo- 
lous one. No wrong that I know 
of can be a trivial one, which to 
him to whom it is done appears a se- 
rious one, serious to such a degree, 
as to mak^ it worth his while to de» 

mand 



but an Encouragement. 35 

mand redress at the hand of justice. — 
Conduct is the test of feeling. I know 
of no right I have to set up any 
feelings of my own as the standard of 
those of my neighbour, in contradic- 
tion to a declaration of his, the truth 
of which is evidenced by his own 
conduct. What to one man again is 
trivial, to another man may be of high 
importance. In the account of wrong 
too must be included, not only the 
individual wrong taken by itself, but 
its effects in the way of encourage- 
ment to repetition, and its effects in 
the way of example. I know of no 
wrong so slight, that by multiplica- 
tion may not become intolerable. 
Give me but a licence to do to any 
person at pleasure the minutest wrong 
conceivable — I need no more, that 
person is my slave. Allow me to rob 
him, though it be but of a farthing, 
M farthing 



36 No Check to Litigiousries^, 

farthing by farthing, I will find the 
bottom of his purse. Allow me but 
to let fall a drop of water upon his head 
— gutta cavat lapidemy the power of 
striking his head off would be less sus- 
ceptible of abuse. 

In pecuniary cases, the smaller the 
sum in dispute, the less reserve is used 
in branding the conduct of the par- 
ties with the charge of litigation, of 
which, in such cases the reproach is 
apt to fall principally, if not exclu- 
sively, to the plaintiff's share. But the 
importance of the sum is altogether 
governed by the circumstances of the 
parties: the amount of it in pounds, 
shillings, and pence, shows nothing. 
One man's income may be a hundred, 
a thousand, four thousand times as 
great as that of another. In England 
there are men whose income exceeds 
60,0001. a year. 151. a year is as 

much 



but an Encouragement, 37 

much as falls to the lot of perhaps 
the greater number of the whole body 
of the people. Without a particular 
caution, a legislator or a judge will 
naturally enough, like any other man, 
take the relation of the sum in dis- 
pute to his own feelings, that is, its 
ratio to his own circumstances, for the 
measure of importance : but by this 
standard he will be sure to be deceived, 
as often as the circumstances of the par- 
ties, or either of them, are materially 
different from his own. Fifty pound, for 
example, will be apt to appear in his 
eyes an object of considerable import- 
ance : an object of which a tenth or a 
twentieth part, or less, might be of im- 
portance sufficient to justify from the 
charge of litigation, the maintenance 
of a suit. A shilling would be almost 
sure to appear to him an object altoge- 
ther trifling 3 an object by no means 
M^ of 



58 No Check to Litigiousness, 

of magnitude enaugh to warrant the 
maintenance of a suit. Fifty pound 
is however a sum of less importance 
to a Duke of Marlborough or Bed- 
ford, than a single shilling (viz. than a 
four thousandth part of 501.) to many 
a man, in truth to probably the ma- 
jority of men in the kingdom. It is 
therefore more unjust, more tyranni- 
cal, to refuse to hear the demand of 
an ordinary working man to the 
amount of a shilling, than it would 
be to refuse to hear the demand of a 
Duke of Marlborough or Bedford, to 
the amount of 501. The legislator, 
who on the plea of checking litiga- 
tion, or on any other plea, exacts of a 
working man as a preliminary to his 
obtaining justice, what that working 
man is unable to pay, does refuse to 
him a hearing, does in a word refuse 
him justice, and that as effectually 

and 



hut aji Encouragement. 39 

and completely, as it is possible to re- 
fuse it. 

That all men should have equal 
rights, not only would be politically 
pernicious, but is naturally impossi- 
ble : but I hope this will not be said of 
equal justice. 

Trivial causes require no such facti- 
tious checks : to such causes were all 
expenses struck off that can be struck 
off, there are natural checks in abund- 
ance, that are unavoidable. There is 
the pain of disappointment: there is 
expense, of which a certain measure 
will every now and then be absolutely 
unavoidable : there is consumption of 
time, which to the w^orking classes, 
that is, to the great majority of the 
people, is expense. 

But even let the cause be trivial, 
and that to such a degree as to ren- 
der the act of commencing the litiga- 
tion 



40 No Check to JLltigiousness^ 

tion blamable, the blame is never so 
great on the side of the party most fa- 
voured by the tax, as on the side of 
the party most oppressed by it. The 
party most oppressed is the complain- 
ant : the party who having suffered 
the injury, such as it is, claims or 
w^ould claim satisfaction for it at the 
hands of justice. But, so as there does 
but exist the smallest particle of an 
injury, the party who claims satisfac- 
tion for it can never be so much in 
the wrong for doing so, but that he 
who refuses satisfaction must be still 
more so. If the demand be just, why 
did not he comply with it .? If just, 
but trifling, why does he contest it? 
In this case then you cannot punish 
in this way the misconduct of one party, 
without rewarding the still greater 
misconduct of the other. \i the tax 
applies a check where there is blame, 

it 



hut an Encouragement. 41 

it afFords protection and encourage- 
ment where there is still greater 
blame. 

Another injustice. — The poorer a 
man is, the more exposed he is to the 
oppression of which this supposed re- 
medy against litigation is the instru- 
ment. But the poorer a man is, the 
less likely he is to be litigious. The 
kss time a man has to spare, and the 
less a man can afford to expend his 
time (not to speak of money) without 
being paid for it, the less likely is he 
to expose himself to such a consump- 
tion of his time. 

Tke rich man, the man who has 
time and money at command, he sure- 
ly, if any, is the man to consume it 
litigiously and frivolously. No won- 
der however, if to a superficial glance, 
the poor should appear more litigious 
than he. There are more of the poor 

than 



4S No Check to Litigiousness, 

than of the rich: and to the eye of 
unreflecting opulence, the causes of 
the poor are all trivial ones. 

We think of the poor in the way 
of charity, for to deal out charity gra- 
tifies not only benevolence, but pride. 
We think much of them in the way 
of charity, but we think little of them 
in the way of justice. Justice, how- 
ever, ranks before charity : and they 
would need less charity, if they had 
more justice. 

What contributes more than any 
thing to the indignation excited by 
suits that are deemed trivial and, on 
account of the triviality vexatious^ is 
the excessive ratio of the expense of 
the suit to the value of the matter in 
dispute : especially when, the matter 
in dispute being pecuniary, its mi- 
nuteness is more conspicuous and de- 
fined. But to what is this expensive- 

ness 



but an Encouragement. A3 

ness owing? — As far at least as these 
taxes are in question, to the legislator 
himself. — Mark then the iniquity. 
He is himself the author of the wrong, 
and he punishes for it the innocent 
and the injured. 

To exclude the poor from justice was 
not enough ; — they must be excluded 
also from mercy. Forty shillings is 
the tax imposed on pardons, by a sta- 
tute of King William (5. W. c. 21. 
§ 3.) forty shilhngs more by another, 
no more than five years afterwards. 
(9 and 10. W. c. 25. § 3, 50.) To- 
gether, 41. : — half a year's income of 
a British subject, according to Dave- 
nant's computation above quoted. 
What is called mercyy let it be remem- 
bered, is in many cases, no more than 
justice : in all cases where the ground 
of pardon is the persuasion of inno- 
cence, entertained either notwithstand- 
M 3 ing 



44 No Check to Litigiousness, 

ing the verdict, or in consequence of 
evidence brought to light after the 
verdict.* All punishments are accord- 
ingly irremissible, to him who has not 
to the amount of half a year's income 
in store or credit : all fines to that 
amount or under, absolutely irremis- 
sible. -|* 

Taxes on law proceedings, so far 
then from being a check to liti- 
gation, are an encouragement to 
it : an encouragement to it in eve- 
ry sense in which it is mischievous 

and 

* For instance the case of Mr. Atkinson. 

t It would be curious enough to know what 
profit the treasury may have drawn from that time 
to the present, from so extraordinary a fund : 
certainly, not enough to pay the salary of one of 
the Lords Commissioners : probably not enough 
to pay that of his valet de chambre. 

These are busy statutes. By the prohibition 
and sale of justice, they run counter to Magna 
Charta: — by the prohibition of Mercy, they 
break the Coronation Oath. 



but an Encouras^emenL 45 



t>' 



and blamable. Would you really 
check litigation, and check it on both 
sides? — the simple course would be a 
sure one. When men are in earnest 
about preventing misconduct in any 
line, they annex punishment to miscon- 
duct in that line, and to that only: a 
species of misconduct which cannot be 
practised but as it were under the eye 
of the court, is of all others the easiest 
to cope with in the way of law. Deal 
with misconduct that displays itself 
under the eye of the court as you 
deal by delinquency at large, and 
you may be sure of succeeding to a 
still superior degree. Discriminate 
misconduct then from innocence : lay 
the burthen on misconduct and mis- 
conduct only, leaving innocence unop- 
pressed. Keep back punishment, till 
guilt is ascertained. Keep back costs, 
as much as possible, till the last stage 

of 



46 No Check to Litigiousfiess, 

of procedure ; keep off from both par- 
ties every thing of expense that is not 
absolutely unavoidable, where litiga- 
tion is on both sides without blame : at 
that last stage if there be found blame, 
throw whatever expense of which you 
allow the necessity to subsist beyond 
what is absolutely unavoidable, throw 
it on that side, and on that side only, 
where there has been blame. If on 
both, then if circumstances require, 
punish it on both sides, by fine for in- 
stance to the profit of the public. 

Litigation, though eventually it 
prove groundless, litigation, like any 
other course of conduct of which 
mischief is the result, is not therefore 
blamable: and where it is blamable, 
there is a wide difference whether it is 
accompanied with temerity only, or 
with consciousness of its own injustice. 
The countenance shewn to the parties 

by 



hut an Encouragement. 47 

by the law ought to be governed, and 
governed uniformly and proportion- 
ally, by these important differences. — 
So much in point of utility: — how 
stands establishment? — Taxes heaped 
on in all stages from the first to the 
last w^ithout distinction : — - all costs 
given or no costs, no medium : — costs 
scarce ever complete, and nothing be- 
yond costs. — No mitigation, or en- 
hancement, in consideration of pecu- 
niary circumstances. No shades of 
punishment in this way correspondent 
to shades of blame : — in most cases no 
difference so much as between consci- 
ousness of injustice and simple teme- 
rity, nor so much as betwixt either and 
innocence. The power of adjudging 
as between costs and no costs, seldom 
discretionary: — that of apportioning, 
never: — nor that of fining beyond the 
amount of costs: — consequently nor 

that 



48 No Check to Litigiousness, 

that of punishing both parties where 
both have been to blame. Were a 
power to be given by statute to im- 
pose on a litigious suitor convicted of 
litigation, a fine to an amount not ex- 
ceeding what the losing party pays 
now, whether he be blamable or 
blameless, it would be cried out against 
perhaps as a great power, too great to 
be given to judges without juries.* 

Justice 

* The distinction between temerity and con- 
sciousness of blame, a distinction pervading hu- 
man nature, and applicable to every species of 
misbehaviour, is scarce so much as known to the 
English law. There are scarce words for it in 
the language. Temerity is taken from the Ro- 
man law. Malice, the term by which English 
Lawyers seem in some instances to have had in 
view the expressing consciousness of blame, pre- 
sents a wrong idea, since in common language it 
implies hatred, an affection which in many in- 
stances of conscious guilt, may be altogether 

wanting :-^ 



but an Encouragement. 49 

Justice shall he denied to no man, jus- 
tice shall be sold to no man, says the first 

of 

wanting: — instance offences of mere rapacity, 
such as theft, robbery, and homicide for lucre. 

The legislator ?^— he talk of vexation ? — He does 
every thing to create the evil, he does nothing to 
remove it. 

I happened once to fall into conversation 
with a man, who, from an Attorney had been 
made Judge of one of the provinces in America, 
Justice, I understood from him, was on a very 
bad footing there : it might be had almost for 
nothing: the people were very litigious: he 
found them very troublesome. A summons 
cost — I forget whether it was three and six- 
pence, or half a crown. Whom the half crown 
went to I do not know : one may be pretty 
certain not to the Judge. — Seeing no prospect 
of our agreeing, I did not pu?h the conversation 
far. The half crown seemed to him too little : 
to me it seemed all too much. The pleasant 
thing would have been to have enjoyed the 
salary in peace and quietness, without being 
plagued with a parcel of low people. Justice 
would then have been upon the best footing pos- 
sible. 



50 No Check to Litigioiisness, 

of statutes. Magna Charta, How is it 
under these later ones ? — Denied, as we 
have seen, to nine-tenths of the peo- 
ple, sold to the other tenth at an un- 
conscionable price. '^It was a conceit 
among the old lawyers, reported if 
not adopted by Lord Coke, that 
a statute made contrary to Magna 
Charfa, though made in all the forms, 
would be a void law. God forbid, 
that by all the lawyers in the world, 
or for the purpose of any argument, 
I should ever suffer myself to be 
betrayed into any such extravagance : 
in a subject it would be sedition, 
in a judge it would be usurpation, 
in any body it would be nonsense, ^f 
But after all it must be acknowledg- 
ed, to be in some degree unfortu- 

sible. He had accordingly a project for check- 
ing litigation by raising the fees. I don't know 
whether it succeeded. 

nate. 



but ail Encouragement 5 1 

iiate, as well as altogether singu- 
lar, that, of an instrument deemed the 
foundation of all liberty, and magni- 
fied as such even still, to a degree of 
fanaticism, a passage by far the most 
important, and almost the only one 
that has any application now a days, 
should be thus habitually trodden un- 
der foot, without remorse or reclama- 
tion.* 

* Let us not for the purpose of any argument,' 
give rise or countenance to injurious imputa- 
tions. Though justice is partly denied, and 
partly sold, the difference is certainly immense, 
betwixt selling it for the personal benefit of the 
king or of a judge, and selling it for the benefit 
of the public : — betwixt selling it by auction, and 
selling it at a fixed price : — betwixt denying it for 
the sake of forcing the sale of it, or denying it 
to a few obnoxious individuals, and denying 
it indiscriminately to the great majority of the 
people. In point of moral guilt, there is cer- 
tainly no comparison : but in point of political 
effect, it may not be altogether easy in every 

part 



5? Whi/ resorted to, 

A tax so impolitic and so grievous, 
a tax thus demonstrated to be the 
worst of taxes, how comes it ever 
to have been made choice of, and 
when made choice of, acquiesced in ? 
— These are not questions of mere 
curiosity : for acquiescence under a 
tax, and that so general, forms at first 
glance no inconsiderable presumption 
in its favour. A presumption it does 
form : but when demonstration has 
shewn itself, presumptions are at aa 
end. 

How comes the tax to have been 
made choice of? — One cause we have 
seen already in another shape ; the 
unscrutinized notion of its supposed 
tendency to check litigation : litiga- 
tion, which where it stands for mis- 
chief, is the very mischief which the 

species 

part of the parallel, to say which mode of abuse 
is most extensively pernicious. 



and acquiesced under. 5S 

species of tax in question contributes 
with all its power to promote. 

Another cause may possibly be, the 
tendency which this sort of tax has to 
be confounded in the eye of an incu- 
rious observer, with other sorts, which 
are either the best of all, or next to 
the best. The best of all are taxes on 
consumption, because not only do 
they fall no where without finding 
some ability to pay them ; but where 
necessaries are out of the question^ 
they fall on nobody who has not the 
option of not paying them if he does 
not choose it. Taxes on property, 
and those on transfer of property, 
such as those on contracts relative to 
property, are the next best: because 
though they are not optional like the 
former, they may be so selected as 
never to call for money but where 
there is ability, nay even ample abi- 
lity,. 



54 Why resorted to, 

lity, to pay them. Now of these two 
most supportable classes of taxes, the 
second are all of them levied by means 
of stamps : taxes on consumption too, 
in many instances, such as those on 
cards, dice, gloves, and perfumery, 
show to the eye as stamp-duties. 
But all these are very good taxes. 
Stamp-duties therefore are good taxes : 
and taxes on justice are all stamp-du- 
ties. — Thinking men look to conse- 
quences ; they look to the feelings of 
the individuals affected : acting men 
look to the stamp: taxes on justice, 
taxes on property, taxes on consump- 
tion, are accordingly one and the same 
object to the optics of finance. Stamp- 
duties too have another most conve- 
nient property, they execute them- 
selves, and law-taxes beyond all others : 
in short they exclude all smuggling.* 

♦ Law paper might be forged : but the diffi- 
culty would be to issue it. 

They 



'a?id acquiesced under. 55 

They heap distress indeed upon dis- 
tress : but the distress is not worth 
minding, as there is no escaping it. 

But the great cause of all is the 
prospect of acquiescence : a prospect 
first presented by hope, since reahzed 
over and over again by experience. 
It is too much to expect of a man of 
finance, that he should anticipate the 
feelings of unknown individuals : it 
is a great deal if he will listen to their 
cries. Taxes on consumption fall on 
bodies of men : the most inconsider- 
able one when touched will make 
the whole country ring again. The 
oppressed and ruined objects of the 
taxes on justice, weep in holes and 
corners, as rats die : no one voice 
finds any other to join with it. 

A tax on shops, a tax on tobacco, 
falls upon a man, if at all, immediately, 
and presses on him constantly : every 
man knows whether he keeps or 

means 



56 W% resorted to, 

means to keep a shop, whether he 
means to sell or to use tobacco. A 
tax on justice falls upon a man only 
occasionally : it is like a thunder- 
stroke, which a man never looks for 
till he is destroyed by it. He does not 
know when it will fall on him, or 
"whether it ever will : nor even whe- 
ther, when it does fall, it will press up- 
on him most, or upon his adversary. 
He knows not what it will amount to : 
he has no data from which to calcu- 
late it : it comes lumped to him in 
the general mass of law charges : a heap 
of items among which no vulgar eye 
can ever hope to discriminate : an ob- 
ject on which investigation would be 
thrown away, as comprehension is im- 
possible. Calamities that are not to 
be averted by thought, are little 
thought of, and it is best not to think 
of them. When is the time for com- 
plaint? Before the thunder-bolt is 

fallen 



and acquiesced under, d7 

fallen it would be too soon : when 
fallen, it is too late. Shopkeepers, to- 
bacconists, glovers, are compact bo- 
dies : they can arm counsel : they 
come in force to the House of Com- 
mons. Suitors for justice have no 
common cause, and scarce a common 
name : they are every body and no- 
body : their business being every 
body's is nobody's. Who are suit- 
ors ? where are they ? what does a 
Chancellor of the Exchequer care 
for them ? what can they do to help 
him ? what can they do to hurt him ? 
So far from having a common interest, 
they have a repugnant interest : to 
crush the injured, is to befriend the 
injurer. 

May not ignorance with regard to 
the quantum and the source of the 
grievance, have contributed some- 
thing to patience ? — Unable to pierce 
the veil of darkness, that guards from 

vulgar 



58 Wh^ resorted to, 

vulgar eyes the avenues of justice, 
men know not how much of the diffi- 
culty of the approach is to be ascribed 
to art, and how much to nature. As 
the consumers of tobacco confound 
the tax on that commodity with the 
price, so those who borrow or would 
have wished to borrow the hand of 
justice, confound the artificial with 
the natural expense of hiring it. But 
if the vi^hole of the grievance be na- 
tural, it may be all inevitable and in- 
curable, and at any rate it may be no 
more the fault of lawyers or law ma- 
kers, than gout and stone are of phy- 
sicians. — Happy ignorance ! — if blind- 
ness to the cause of a malady could 
blunt the pain of it ! 

There want not apologists-general 
and talkers in the air, to prove to us 
that this as well as every thing else, 
is as it should be. The expense, the 
delay, and all the other grievances, 

which 



and acquiesced under. 59 

which activity has heaped up, or negli- 
gence sutTered to accumulate, are the 
prices which, according to Montes* 
quieu, we must be content to pay for 
liberty and justice. A penny is the 
price men pay for a penny loaf: there- 
fore why not two-pence ? and, if three- 
pence, there would be no harm done, 
since the loaf would be worth so much 
the more. 

May not a sort of instinctive fellow- 
feeling among the wealthy have con- 
tributed something, if not to the im- 
position, at least to the acquiescence? 
It is the wealthy alone, that either by 
fortune, situation, education, intelli- 
gence, or influence, are qualified to 
take the lead in legislation : and the 
characteristic property of this tax, is 
to be favourable to the wealthy, and 
that in proportion to their wealth. 
Other taxes afford a man no indemni- 
fication for the wealth they take from 
N him : 



60 Why resorted tOy 

him : this gives him power in exchange. 
The power of keeping down those 
who are to be kept down, the power 
of doing wrong, and the more gene- 
rous pride of abstaining from the wrong 
which it is in our power to do; advan- 
tages such as these, are too pcecious not 
to be grasped at with avidity by human 
weakness : and, as in a country of po- 
litical liberty, and under a system of 
justice in other respects impartial, they 
can only be obtained by a blind and 
indirect route such as this, the incon- 
venience of travelling in it, finds on 
the part of those who are well equip- 
ped for it, the more patient an acqui- 
escence. 

Will it be said that abolishing the 
taxes on justice would not answer the 
purpose, for that supposing them all 
abolished, justice would still remain 
inaccessible to the body of the people ? 
*— -This would be to' justify one abuse 

by 



and acquiesced under, 61 

by another. The other obstacles by 
which the avenues to justice have been 
blocked up, constitute a separate head 
of abuse, from which I gladly turn 
aside, as being foreign to the present 
purpose. Take off law taxes all toge- 
ther, the number of those to whom jus- 
tice will still remain inaccessible, 
would still, it must be confessed, be 
but too great. It would however not 
be so great, as it is at present under 
the pressure of those taxes. Though 
you could not tell exactly to how ma- 
ny you would open the doors of jus- 
tice, you might be sure you opened 
them to some. Though you would 
still leave the burthen but too heavy, 
you would at any rate make it proper- 
tionably more supportable. 

If by taking off these taxes, you re- 
duced the expense of a common action 
from Q51. to 201., you might open 
the door, suppose, to one in five of 
N 2 those 



62 Why resorted to, 

those against whom it is shut at pre- 
sent. Even this would be something : at 
any rate whatever were the remaining 
quantum of abuse, which you still suf- 
fered to subsist, you would have the 
consolation at least of not being active- 
ly instrumental in producing it. To 
reform in toto a system of procedure is 
a work of time and difficulty, and 
would require a rare union of legal 
knowledge with genius;— repealing a 
tax may require discernment, candour, 
philanthropy, and fortitude; but is a 
work of no difficulty, requires no extra- 
ordinary measure of science, nor even 
so much time as the imposing of one. 

But by whatever plea the continu- 
ance of the subsisting taxes of this 
kind may be apologized for, nothing 
can be said in favour of any new addi- 
tion to the burthen. The subsisting 
ones, it may be said, have been acqui- 
esced in, and men are used to them : 

in 



and acquiesced under! 63 

in this respect at least they have the ad- 
vantage of any new ones which could 
be substituted in the room of them. 
But even this immoral plea, which puts 
bad and good upon a level, effacing all 
distinction but that between established 
and not established, even this faint plea 
is mute against any augmentation of 
this worst of evils. 

To conclude — Either I am much 
mistaken, or it has been proved-^ 
that a law tax is the worst of all taxes, 
actual or possible : — that for the most 
part it is a denial of justice, that at 
the best, it is a tax upon distress : — 
that it lays the burthen, not where 
there is most, but where there is least, 
benefit: — that it co-operates with 
every injury, and with every crime : — 
that the persons on whom it bears 
hardest, are those on whom a bur- 
then of any kind lies heaviest, and 
that they compose the great majority 

of 



64 Recapitulation. 

of the people : — that so far from being 
a check, it is an encouragement to li- 
tigation : and that it operates in direct 
breach of Magna Charta, that venera- 
ble monument, commonly regarded as 
the foundation of English liberty. 

The statesman who cares not what 
mischief he does, so he does it without 
disturbance, may lay on law taxes with- 
out end : he who makes a conscience 
to abstain from mischief will abstain 
from adding to them : he whose ambi- 
tion it is to extirpate mischief, will re- 
peal them. 

General error makes law, says a 
maxim in use among lawyers. It 
makes at any rate an apology for law ; 
but when the error is pointed out, the 
apology is gone. 



NOTES 



TO THE 



SECOND EDITION. 



Mem. — Anno, 1796. At a dinner at Mr. M. 

P.'s, in Street, Mr. R. in the presence 

of Mr. William Pitt, (then Minister) took me 
aside, and told me that they had read my Pam- 
phlet on Law Taxes; that the reasons against 
them were unanswerable, and it was determined 
there should be no more of them. 

Anno, 1804, July 10, 12, 14, 18.— This being 
in the number of Mr. Addington's Taxes, Mr. 
Pitt, upon returning to office, took up all those 
Taxes in the lump. On the above days, this Tax 
was opposed in the House of Commons : and Mr. 
Wyndham, according to the report in the TimeSj 
on one of those days, spoke of this Pamphlet as 
containing complete information on the subject ; 
observing at the same time, that it was out of 
print. On behalf of administration, nothing like 
an answer to any of the objections was attempted : 
only the Attorney- General (Percival) said, that 

the 



66 



the addition proposed to those Taxes, was no 
more than equal to the depreciation of money. 

Mr. Addington, before this, had recourse to the 
Tax on Medicine here spoken of, (p. 22.) So 
that, in the course of his short administration, if 
the representation here given be correct, he had 
had the misfortune to find out and impose the two 
worst species of taxation possible. Compare this 
with Denmark, and its courts of Natural Proce- 
dure, called Reconciliation Courts. 

26th February, 1816. — Unalleviated by any ade- 
quate hope of use, too painful would be the task, of 
hunting out, and holding up to view, the subse- 
quent additions, which this worst of oppressions 
has, in this interval of twenty years, been re- 
ceiving. 

Money, it is said, must be had, and no other 
taxes can be found. The justification being con- 
clusive, the tax receives its increase : next year, 
from the same hand, flow others in abundance. 

Grievous enough is the Income Tax, called, 
lest it should be thought to be what it is, the 
Property Tax. — Grievous that tax is, whatever be 
its name ; yet, sum for sum, compared with this 
tax, it is a blessing. Instead of 10 per cent, sup- 
pose it 80 per cent. Less bad would it be to add 
yet another 10 per cent, than a tax to an equal 
amount upon justice. 

Grievous 



67 



Grievous have been the additions, so lately and 
repeatedly made, to the taxes on Conveyances and 
Agreements. Extensive the prohibitory part of 
the effect, though the pressure, — confined as 
usual to the poor, i. e. the great majority of the 
community, who have none to speak for them, — 
is scarcely complained of by the rich. Yet, were 
all law-taxes taken off, and the amount thrown 
upon Conveyances and Agreements, this — even this 
— would in reahty be an indulgence. 

Whether the oppression be more or less griev* 
ous, is never worth a thought. Will it be sub- 
mitted to ?^ — This is the only question. Charity 
is kicked out of doors. Hope is fled. Faith and 
Piety remain, and atone for every thing. 

For a list of about twenty-eight other sources 
of factitious delay, vexation, and expense, and 
thence of denial of justice, produced by the judges 
of former times, for the augmentation of lawyers' 
profit, their own included, — together with a list 
and summary account of the devices by which 
these burthens have been imposed, and by which 
Technical stands distinguished from Natural PrO' 
cedure, — see by the same author, Scotch Reformy 
&c. printed for Ridgway, Piccadilly. 



68 



ADDITION BY A LEARNED FRIEND. 



In the court of Chancery, two case^ have re- 
cently occurred, which may serve as an illustra- 
tion of the extent in which the taxes upon law 
proceedings may operate as a denial of justice. 
In one case — Roe v. Gudgeon — the Defendant, in 
his answer to the Plaintiff's bill, submitted that 
he ought not to be compelled to set out certain 
accounts which had been required by the bill, as 
the expense of taking what is called an office copy 
of them, — a necessary preliminary to any further 
proceeding on the part of the Plaintiff in the 
cause, — would amount to the sum of 29,000/. : an 
expense almost wholly arising from the Stamps on 
the Paper, on which the office copy of the answer 
is compulsorily made. In this case the court de- 
termined, that it was not necessary these ac- 
counts should be set out : but in coming to this 
conclusion, how far the court was determined by 
the nature of the particular case, or by the magni- 
tude 



69 



tude of the expense that would thus be occasion- 
ed; — or whether if, without any such objection, the 
Defendant had actually set out these accounts, 
the Plaintiff could have been relieved from pur- 
suing the regular mode of procuring a copy of 
them, and thus incurring the above expense ; — or 
whether, if the expense had been instead of 
29,000/. only 28 or 27 thousand pounds, such 
an objection would have been hstened to ; — it is 
extremely difficult to say. 

The other case alluded to is one in which 
from peculiar circumstances, it is not thought 
proper to mention the names of the parties. 
It is optional with a man to be a Plaintiff in 
a cause, it is not altogether so optional with 
him to be a defendant. The preceding case 
shews that it is not always safe for a man to 
become a Plaintiff, without 28,000^ at least in 
his pocket, to begin with, over and above what 
is necessary for his maintenance. — The following 
case shews that a man may not be always able to 
resist a demand, however unjust it may be, with- 
out being able to support an outlay of at least 
800/. In the case in question, the writer of this 
has been assured, — and from authority, which he 
has peculiar reason for relying upon, — that the ex- 
pense of merely putting in an answer by one of the 
Defendants to a bill in Equity, amounted to the 

above 



70 



above sum of 800/. : what part of this expense 
was occasioned by the tax on law proceedings 
cannot be accurately ascertained, but it assuredly 
constituted a very considerable proportion of 
that sum. 



FINIS. 



J. M'Creery^ Printer, 
Black-Horsfc-Court, London. 



I 



JUL 



1" 



